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88–926 2014

TELEMEDICINE: A PRESCRIPTION FOR SMALL 

MEDICAL PRACTICES? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH AND TECHNOLOGY 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JULY 31, 2014 

Small Business Committee Document Number 113–080 

Available via the GPO Website: www.fdsys.gov 

SBREP-219 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

BLAINE LUETKEMEYER, Missouri 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JAIME HERRERA BEUTLER, Washington 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

DAVID SCHWEIKERT, Arizona 

KERRY BENTIVOLIO, Michigan 

CHRIS COLLINS, New York 

TOM RICE, South Carolina 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

YVETTE CLARKE, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRAD SCHNEIDER, Illinois 

RON BARBER, Arizona 

ANN McLANE KUSTER, New Hampshire 

PATRICK MURPHY, Florida 

LORI SALLEY, Staff Director 

PAUL SASS Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Chris Collins ................................................................................................... 1 

Hon. Janice Hahn .................................................................................................... 2 

WITNESSES 

Karen S. Rheuban, M.D., Senior Associate Dean for CME and External Affairs Director, University of Virginia Center for Telehealth, University of 

Virginia, Charlottesville, VA ............................................................................... 3 

Megan McHugh, Ph.D., Research Assistant Professor, Dirctor, Program in 

Healthcare Policy and Implementation, Center for Healthcare Studies, Institute for Public Health and Medicine & Department of Emergency Medicine, Northwestern University, Feinberg School of Medicine, Chicago, IL ..... 5 

Maggie Basgall, Community Development Specialist, Nex-Tech, Lenora, KS, 

testifying on behalf of NTCA - The Rural Broadband Association .................. 7 

Brenda J. Dintiman, M.D., FAAD, Fair Oaks Skin Care Center, Fairfax, 

VA, testifying on behalf of the American Academy of Dermatology ................ 9 

APPENDIX 

Prepared Statements: 

Karen S. Rheuban, M.D., Senior Associate Dean for CME and External 

Affairs Director, University of Virginia Center for Telehealth, University of Virginia, Charlottesville, VA ............................................................ 19 

Megan McHugh, Ph.D., Research Assistant Professor, Director, Program 

in Healthcare Policy and Implementation, Center for Healthcare Studies, Institute for Public Health and Medicine & Department of Emergency Medicine, Northwestern University, Feinberg School of Medicine, 

Chicago, IL .................................................................................................... 36 

Maggie Basgall, Community Development Specialist, Nex-Tech, Lenora, 

KS, testifying on behalf of NTCA - The Rural Broadband Association .... 43 

Brenda J. Dintiman, M.D., FAAD, Fair Oaks Skin Care Center, Fairfax, 

VA, testifying on behalf of the American Academy of Dermatology ......... 51 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

Parkinson’s Action Network ............................................................................ 55 

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(1) 

TELEMEDICINE: A PRESCRIPTION FOR SMALL 

MEDICAL PRACTICES 

THURSDAY, JULY 31, 2014 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON HEALTH AND TECHNOLOGY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:09 a.m., in Room 

2360, Rayburn House Office Building, Hon. Chris Collins [chairman of the Subcommittee] presiding. 

Present: Representatives Collins, Coffman, Luetkemeyer, and 

Hahn. 

Chairman COLLINS. Well, good morning everyone. This hearing 

will come to order. I want to welcome our witnesses and thank you 

all for being here. 

Small businesses as all of us know are innovators, and particularly now in health care. Small companies are transforming medical care with new products, new services and cutting-edge technology. And small medical practices are changing as well. They are 

helping us connect and serve a more mobile population. 

Telemedicine refers to patient medical care where the provider 

and patient are separated by distance. Although the adoption of 

telemedicine has been slow, it is increasing, and recently, several 

medical organizations adopted model policies for its appropriate 

use. 

This technology offers the promise of connecting small physician 

practices with patients, other medical providers, hospitals in areas 

that are medically underserved. 

Today, some small practices are finding it difficult to stay afloat 

due to the burdens of complying with the health care law and the 

cost of operating a small practice. Telemedicine may provide opportunities for these practices to broaden their reach and offer more 

accessible care to more patients, serve a larger geographic area, or 

consult with distant medical colleagues. 

Some have suggested that small practices can be the hub that 

connects a patient’s health care team. But small practices can encounter numerous barriers to telemedicine. The cost of technology, 

broadband availability, licensing requirements and reimbursement 

rules from private insurers, as well as Medicare and Medicaid, may 

limit or delay the adoption of telemedicine. 

Today this subcommittee will examine a topic that touches both 

health and technology, the use of telemedicine and its possibilities 

for small medical practices. We look forward to hearing from our 

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distinguished panel of witnesses about this exciting convergence of 

medicine and technology. 

I would now like to yield to Ranking Member Hahn for her opening remarks. 

Ms. HAHN. Where are the women? Oh, they are all here. I usually always say that with the witnesses, but this is a good crop of 

witnesses. 

Thank you, Mr. Chairman. 

Welcome to the witnesses, I look forward to hearing from you. 

And as the chairman said, the coming expansion of telemedicine 

has the potential to increase access to health care to underserved 

communities, both in our inner cities and rural areas and keep 

Americans across the country healthy and independent. 

Today’s hearing offers us an opportunity to examine ways in 

which we can increase the use of telemedicine, especially among 

small medical practices. 

We know that if implemented correctly, small practices may be 

able to cut costs, connect with patients that would be otherwise out 

of reach and improve patient care. Enabling doctors to better communicate with their patients has been shown to dramatically decrease hospital readmission rates and give patients peace of mind. 

Enabling health care providers to communicate with each other 

would mean expanded access to the latest treatments and the best 

possible care available. Unfortunately, questions surrounding reimbursement, licensing, liability and the cost of technology have prevented many small practices from adopting telemedicine services. 

The technology we need is ready. However, our Nation’s health 

care system is not. In the coming years, we as a country will have 

to address how telehealth care is reimbursed. How and where doctors are able to practice remotely and how to handle sensitive patient information. 

None of these questions have easy answers, and I appreciate 

every one of our witnesses for joining us today in hopes of shining 

some light on these and other issues. I look forward to hearing 

from all of you and from my colleagues. 

Colleagues, where are they? They are not here. 

As the telemedicine expansion continues, I hope we can work together so that doctors can provide patients with the very best care 

possible. 

I yield back. 

Chairman COLLINS. Thank you. 

Before we start, there will be votes coming up at some point, 

we’ll see where we are in the hearing. And worst case, we will adjourn and then come back and finish. It is also our last day in session for 5 weeks. So there is a lot going on, and we will play this 

by ear. 

If committee members have an opening statement prepared, I 

will ask that they submit those for the record. Also, we have some 

timing lights, you’ll see them start out as green, turn yellow, and 

turn red. We certainly have some latitude with those, but it is just 

a guide for your 5 minutes. 

Our first witness today is Dr. Karen Rheuban. Dr. Rheuban is 

senior associate dean for continuing medical education and exterSBREP-219 with DISTILLER

3 

nal affairs director for the University of Virginia’s Center for Telehealth in Charlottesville, Virginia. 

Dr. Rheuban is past president of the American Telemedicine Association, very appropriate for today’s hearing. 

Welcome Dr. Rheuban, you have 5 minutes for your testimony. 

STATEMENTS OF KAREN S. RHEUBAN, M.D., SENIOR ASSOCIATE DEAN FOR CME AND EXTERNAL AFFAIRS DIRECTOR, 

UNIVERSITY OF VIRGINIA CENTER FOR TELEHEALTH, UNIVERSITY OF VIRGINIA, CHARLOTTESVILLE, VA; MEGAN 

MCHUGH, PH.D., RESEARCH ASSISTANT PROFESSOR, DIRECTOR, PROGRAM IN HEALTHCARE POLICY AND IMPLEMENTATION, CENTER FOR HEALTHCARE STUDIES, INSTITUTE FOR 

PUBLIC HEALTH AND MEDICINE & DEPARTMENT OF EMERGENCY MEDICINE, NORTHWESTERN UNIVERSITY, FEINBERG 

SCHOOL OF MEDICINE, CHICAGO, IL; MAGGIE BASGALL, 

COMMUNITY DEVELOPMENT SPECIALIST, NEX-TECH, 

LENORA, KS, TESTIFYING ON BEHALF OF NTCA, THE RURAL 

BROADBAND ASSOCIATION; AND BRENDA J. DINTIMAN, M.D., 

FAAD, FAIR OAKS SKIN CARE CENTER, FAIRFAX, VA, TESTIFYING ON BEHALF OF THE AMERICAN ACADEMY OF DERMATOLOGY 

STATEMENT OF KAREN S. RHEUBAN, M.D. 

Dr. RHEUBAN. Chairman Collins, Ranking Member Hahn, committee members, thank you for your invitation to testify regarding 

the opportunities and challenges faced by health care providers 

seeking to incorporate telehealth into everyday practice. 

I am the director of the Center for Telehealth at the University 

of Virginia and a practicing pediatric cardiologist. At our center, we 

connect patients at 128 different sites across the Commonwealth of 

Virginia for access to specialty care. Telemedicine or connected care 

is not a new specialty, a new procedure or a new clinical service 

but rather technology designed to enable the provision of health 

care services at a distance, whether it is down the road, or across 

the State, or across the country. 

Twenty-first century telemedicine services can be provided live 

by a high-definition video conferencing, supported by peripheral devices or asynchronously using storing forward technology or using 

remote patient monitoring tools keeping patients healthy at home. 

Telemedicine improves patient triage, reduces the burden of travel for care, enhances timely access to care and saves lives. A few 

examples: Telemedicine helps us to treat acute stroke victims in 

critical access hospitals when every second counts. It allows us to 

manage high-risk pregnant women in their home communities, reducing premature deliveries. 

Through telemedicine, we provide sorely needed mental health 

services. We screen patients for diabetic retinopathy, the number 

one cause of blindness in working adults. We monitor heart failure 

patients after discharge from the hospital to keep them healthier 

at home and in the workforce. 

Regardless of the delivery system and, in particular, as we migrate from volume-based to value-based systems of care, telehealth 

supports patient engagement and self management. As supported 

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by extensive evidence, telemedicine improves clinical outcomes and 

also lowers the cost of care. 

It is widely accepted that our Nation faces a shortage of physicians and other health professionals, expected to worsen with our 

aging population, higher rates of chronic illness and greater numbers of covered individuals. The use of telemedicine maximizes provider efficiency, but again most importantly, it is good for patients. 

Despite our country’s multibillion dollar investment in telemedicine, broadband expansion, and health information technologies, efforts to promulgate continued integration of telemedicine, unfortunately, still remains stifled by 20th century Federal and State barriers to more widespread adoption. 

Opportunities for small practices to adopt telehealth are extensive, depending on the credentials of the provider and the model 

they might wish to deploy. Primary care and specialty care providers can connect to their patients or to one another through video 

conferencing. They may offer clinical services through store and 

forward technologies, serve on panels for telemedicine services companies, and utilize remote patient monitoring in the home to manage their patients with chronic illness. 

Regardless of the model chosen, it is imperative that interested 

practitioners take into consideration all relevant Federal and State 

policies and specialty society best practices. Significant challenges 

still impact telehealth practice, such as originating sight restrictions on reimbursement by Medicare and varying degrees of reimbursement by State Medicaid programs and private payers. Last year, sadly, Medicare reimbursed less than $12 million nationwide for telemedicine related services. A patient’s or provider’s 

zip code should not determine eligibility for telemedicine care 

when, on the other hand, our Medicare and Medicare programs 

spend many hundreds of millions of dollars annually on transportation costs. As an example, last year our UVA program saved patients more than 4.8 million miles of driving for access to care. It 

keeps patients local in their community. 

Equally challenging are variable state board regulations that 

have led to continued uncertainty for practitioners, confusion about 

credentialing and privileging regulations, lack of licensure portability, which is a deterrent to interstate practice. Anti-kickback 

laws, HIPAA privacy and security regulations, evolving technology 

platforms, device interoperability and health information exchange 

are all important issues to be considered, as is the cost of sufficient 

bandwidth. 

In conclusion, telehealth is a valuable tool to address the significant challenges of access to high quality care to mitigate workforce 

shortages, improve population health and lower the cost of care. 

There are many opportunities for small practices to integrate telehealth into everyday practice. 

However, even for large health care systems such as our own, 

managing and navigating the complex legal and regulatory environment which impacts telehealth can be very challenging. It is imperative that we create and implement policies that foster certainty, high quality, secure and sustainable solutions that empower 

patients, and providers, and payers to adopt 21st century models 

of care. Thank you. 

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Chairman COLLINS. Thank you Dr. Rheuban. 

I would now like to yield Ranking Member Hahn for the introduction of our next witness. 

Ms. HAHN. Thank you. 

I am pleased to introduce Dr. Megan McHugh, research assistant, professor, and director of health policy and implementation at 

the Institute for Public Health and Medicine Center for Health 

Care Studies at Northwestern University, Feinberg School of Medicine. 

Dr. McHugh’s research focuses on Federal health policy and advocacy and has been awarded support by prestigious institutions 

like the Robert Wood Johnson Foundation, CMS, CDC and the Kaiser Family Foundation. 

She holds a masters from the College of William and Mary and 

a Ph.D. in public policy from the George Washington University. 

Welcome Dr. McHugh. 

STATEMENT OF MEGAN MCHUGH, PH.D. 

Ms. MCHUGH. Thank you, Chairman Collins, Ranking Member 

Hahn and members of the subcommittee. 

I’m honored to have been invited to testify today. My name is 

Megan McHugh, and I am a research assistant professor at Northwestern University. And my research and teaching focuses on Federal health policy and the impact of policy changes on health care 

costs, quality and access. And the opinions that I am going to share 

today are my own and not of the university 

First, I would like to make three points: First, by adopting telemedicine services, small physician practices may be better prepared to participate and succeed in new models of care. The traditional fee-for-service payment system which pays providers for each 

visit, procedure or test is an obstacle to achieving the triple aim of 

better health care, better health and lower cost. 

In an effort to move away from the fee-for-service model, the 

Center for Medicare and Medicaid Innovation which was created by 

the Affordable Care Act is supporting the development of new payment and delivery models, which reward providers for delivering 

high quality, low-cost care. 

Telemedicine has played an important role in these value-based 

purchasing programs. For example, under the bundled payment 

demonstration providers have the flexibility and the financial incentive to care for patients using the best means possible at a lowest cost. And since some data suggests that telemedicine offers 

comparable care quality at a lower cost than traditional in-person 

visits, providing care via telemedicine is a natural choice. 

Given the momentum towards value-based purchasing, small 

physician practices would be well served by exploring whether and 

how telemedicine may help them provide high-quality care at a 

lower cost. 

My second point is that reimbursement and state licensing policies serve as barriers to the adoption of telemedicine by small physician practices. Medicare generally limits payment for telemedicine services to interactive audio and video telecommunications 

with realtime conversations where the original sites are located in 

a rural area. 

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As a result, telemedicine accounts for a very small portion of 

Medicare services, as we just heard. However, through the rulemaking process, CMS has been gradually expanding reimbursement for telemedicine. For example, just this year CMS changed 

the geographic criteria for originating sites, which will expand reimbursable telemedicine services to more rural Medicare beneficiaries. 

Although research on the impact of telemedicine on cost, quality 

and access is very promising, the evidence, I believe, is not conclusive. And as a result, I believe that the gradual expansion of telemedicine coverage under Medicare is a sensible course of action 

and one that will produce a slow but steady increase in the number 

of small practices that effectively and efficiently use telemedicine. 

And a good first start, in my opinion, would be to extend coverage for telemedicine to all value-based purchasing programs, like 

patient-centered medical homes and accountable care organizations. 

With regard to licensure, some State medical boards require telemedicine providers practicing across State lines to have a valid license in the State where the patient is located. And providers who 

want to practice across State lines must obtain an additional State 

license, which can be administratively burdensome. 

This burden may by greater for small practices, which are less 

likely to have support staff who can help them navigate this process. My personal opinion is that the current medical licensure system is inadequate to address the growing practice of telemedicine. 

And there are several alternative models that could be considered, 

though each of them might raise some political and potentially 

legal challenges. 

Then, third, any policy that expands the use of telemedicine 

should be carefully monitored. The academic literature on the impact of telemedicine is voluminous and still growing, and overall, 

the evidence suggests that telemedicine can improve access to care 

as well as the value of care. 

However, evidence of the impact of telemedicine is not entirely 

consistent. Some studies have shown no positive benefits to telemedicine. Clearly, there’s a need for continued research in this 

area, but there’s another issue concerning research that I believe 

needs to be addressed and that is that many studies of the effectiveness of telemedicine have been conducted within hospitals or 

large physician practices. So, as a result, our understanding of the 

impact of telemedicine among small physician practices is much 

more limited. 

In conclusion, telemedicine is an important tool for small practices as payers transition away from the fee-for-service model. 

State and Federal policymakers have the ability to facilitate the 

adoption of telemedicine through policies related to reimbursement 

and licensing, but expansion should be coupled with oversight to 

monitor impact. 

Again, I’d like to thank you for allowing me to appear before you 

today and share my opinions, and I would be happy to answer my 

questions that you might have. 

Chairman COLLINS. Thank you very much, Dr. McHugh. 

Our next witness is Maggie Basgall. 

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Maggie is the community relations representative for Nex-Tech 

in Lenora, Kansas. Recently, Ms. Basgall was involved in a telemedicine pilot project, collaborating with local hospitals and clinics 

regarding their broadband needs. She is testifying on the behalf of 

the NTCA, the Rural Broadband Association. 

Welcome, and you have 5 minutes. 

STATEMENT OF MAGGIE BASGALL 

Mr. BASGALL. Great. Good morning and thank you for having me. 

Chairman Collins, Ranking Member Hahn and members of the 

subcommittee, I am honored to be here today on behalf of the 

NTCA, the Rural Broadband Association, to discuss the use of telemedicine and its possibilities for small medical practices from the 

perspective of Nex-Tech. 

Nex-Tech serves over 2,200 broadband customers and has over 

2,300 voice access lines spread across a 9,300 square mile area in 

rural northwest and central Kansas. We serve 11 hospitals and 14 

clinics among several other small physician practices. 

I worked as a community development specialist for Nex-Tech for 

the past 4 years. I have a passion for rural communities, because 

I lived in rural Kansas for most of my life. Most of the my time 

with Nex-Tech is spent working with our communities, particularly 

our anchor institutions, such as health care providers. 

Nex-Tech recently focused a pilot project on telemedicine in efforts to promote a greater adoption of advanced telemedicine capabilities. We spent time meeting with each hospital and several of 

the clinics in the small physician practices in our footprint. 

Collaborating with these health care providers was very enlightening as we learned of the rather large barriers they are faced with 

in looking at adopting telemedicine. Hospitals and clinics are undergoing large changes stemming from the Affordable Care Act and 

other regulatory changes. Several are still in the process of converting to electronic health care records and looking into new financial challenges. Others share that much of their time and efforts have to be focused toward doctor recruitment, insurance barriers, and other pertinent issues. 

That being said, however, they are all aware of the importance 

of broadband and how their access to affordable, reliable connections is significant. We have noticed an increase in subscribed 

bandwidth for our health care facilities, even in just the last couple 

of years. 

We have several hospitals with 50 megabyte per second connections and higher. Many are currently using it for everyday activities, such as offsite backup, checking insurance eligibility, sending 

and receiving digitalized files, conducting research, et cetera. 

Most of these hospitals are engaging in some forms of telemedicine, generally consisting of consultations from patient to mental 

health care provider or screen-to-screen trainings and Webinars. 

There are more uses that our hospitals and clinics could delve into. 

So many of our customers live in areas that are literally hours 

and hours from the nearest specialist or major hospital. Telemedicine has been but could be even more so of the lifesaver for those 

in our area. 

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Even with health care staff time and efforts directed to it, there 

are other factors that come into play as well. As we’ve talked 

about, there is a lack of health insurance reimbursement for care 

through telemedicine and a lot of questions regarding physician licensure. 

In visiting with hospitals, there is also a lack of resources showcasing tangible applications or even overall guidance that hospitals 

can utilize to get a sense of the efficiencies that can be added. 

There are programs available that these hospitals, clinics, and 

physician practices can look toward for funding, but so often these 

programs are overwhelming and can be difficult to navigate 

through. 

We do have fascinating ideas and programs that are developing 

at a regional hospital in our footprint, Hays Medical Center. They 

are currently preparing to deploy robots to four pilot locations that 

can effectively transport a doctor stationed at a hospital to a remote area. 

There the patient can interact with the doctor through the robot 

with the use of plug-ins equipped to conduct diagnostic testing. 

Possibilities such as these are endless, but seeing these through 

fruition can be another story. 

Unfortunately, due to a lot of these barriers mentioned, we 

haven’t been able to move forward with our telemedicine pilot 

project we began in 2012. Not only are our area health care facilities facing these types of barriers, but Nex-Tech is as well. Telemedicine cannot be implemented without an underlying robust 

wired network. Unfortunately, Nex-Tech has been faced with a 

number of regulatory uncertainties stemming from the Federal 

Communication Commission’s high-cost fund reforms. 

Due to the high expense of delivering quality communication networks in rural areas, rural providers need predictable universal 

service support. However, in 2011, the FCC made changes from 

what was available to the Quantile Regression Analysis, QRA, 

which has created great uncertainty in the rural telecom arena. 

While the FCC has now eliminated the QRA, we have reverted 

back to the previous methodology, a new Connect America Plan for 

rural telecommunications providers still has not been developed. 

In summary, we at Nex-Tech are just absolutely thrilled to be 

able to collaborate with our area hospitals clinics and physician 

practices on current and future ideas and projects in telemedicine 

arena. However, we must be able to continue to deliver the services 

that hospitals are currently subscribed to and be ready for the influx of those who continue to need more bandwidth as they grow 

and technology advances. 

Rural America will not realize the promise of telemedicine, however, without a broadband USF that offers carriers the regulatory 

certainty needed to make network investments and an insurance 

industry that lacks telemedicine coverage. 

Guidance is also needed for health care facilities to take advantage of all that telemedicine offers. We look forward to working 

with Congress and the appropriate agencies to ensure these programs work as efficiently and effectively as possible. Thank you. 

Chairman COLLINS. Thank you very much. 

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Our final witness is Dr. Brenda Dintiman. She is a physician 

with Fair Oaks Skin Care Center in Fairfax, Virginia. Dr. 

Dintiman is a board certified dermatologist who has practiced for 

over 16 years. She is testifying on behalf of the American Academy 

of Dermatology. 

Thank you very much. 

STATEMENT OF BRENDA J. DINTIMAN, M.D., FAAD 

Dr. DINTIMAN. Chairman Collins and Ranking Member Hahn, as 

a fellow of the American Academy of Dermatology Association, 

which represents more than 13,000 dermatologists nationwide, and 

a past president of the Medical Society of Northern Virginia, I commend you for holding a hearing on how telemedicine can further 

the efficiency, quality and access to health care. 

I am here today to discuss barriers of implementing telemedicine 

as a modality of care. Specifically, lack of reimbursement and cumbersome credentialing posed the greatest challenges. Although 

some reimbursement exists, it is not consistent across payers or 

across States to allow for proper patient access. Telemedicine is an 

innovative, rapidly evolving method of care delivery. The Academy 

supports the appropriate use of telemedicine as a means of improving access to the expertise of board-certified dermatologists to provide high quality, high value care. 

As a physician who runs a small dermatology practice in Northern Virginia, I currently use DermUtopia for the provision of telemedicine. This is a HIPAA compliant, mobile phone, and Webbased application. Through this application, I am able to evaluate, 

triage and treat both my patients and patients who do not have a 

primary dermatologist. 

We are aiming to go treat Medicaid patients through 

DermUtopia. However, there have been delays in ability to solidify 

funding, despite the fact that Medicaid has been improved for reimbursement for telehost services in Virginia. 

I have faced several barriers to most effectively providing care 

via telemedicine. While I face these barriers as a physician, it is 

ultimately the patients, often the most economically vulnerable, 

that are the most directly affected. The largest barrier, as noted, 

is reimbursement for telehealth services. Without reimbursement, 

providers and patients are unlikely to utilize telehealth. 

The benefits of such reimbursement would be widespread, 

telederm can save a patient time missed from work, travel time 

and, in the correct clinical context, allow for timely diagnosis and 

treatment when face-to-face care is unavailable or inaccessible. 

While telederm has traditionally been used to increase access to 

the remote or underserved areas, it indeed has great potential for 

serving a variety of patients for dermatological needs. For instance, 

insured patients in urban areas may face similar access delays or 

issues as those in geographically remote areas and therefore benefit from teledermatology. 

I have seen firsthand a number of patients that could have had 

the consultation done virtually and prevented an onerous trip to 

the office or to an urgent care or emergency room. An 89-year old 

woman who lives alone at home, with no family in the area, and 

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who would need to be brought to the doctor via wheelchair and 

transport vehicle, may be more easily evaluated via telemedicine. 

A nursing home patient with dementia who requires a nurse 

aide, and transportation, and coordination costs from the nursing 

home to evaluate a leg ulcer or an early infection could be effectively evaluated via teledermatology. A 2-year old with severe eczema, an infection, who cannot get in to see a dermatologist due 

to lack of access to a Medicaid dermatologist and inability for the 

parents to transport them during work hours, across the city, two 

bus rides, away could be easily evaluated and monitored via teledermatology. 

Overall, telemedicine provides a modality of care which can expand patient access to medical specialists, such as dermatologists. 

But barriers to implementation remain. Most notably issues of 

proper credentialing and reimbursement exist to varying degrees 

across States. These barriers impact providers but ultimately can 

hinder patient access to care. 

I as well as the academy appreciate the subcommittee’s continued leadership on this issue. And look forward to working with you 

to ensure that patients can benefit from high quality, timely and 

cost-efficient care for telemedicine. Thank you. 

Chairman COLLINS. Thank you very much. 

I want to thank all of our witnesses. 

So far, we haven’t had votes called. So, at this point, I would like 

to yield to Mr. Luetkemeyer for his 5 minutes of questioning. 

Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Ms. Dintiman, thank you for your testimony. I was kind of—as 

we go through the process here of talking about telemedicine, I’m 

kind of curious, you’re involved in the practice every day. How 

many more patients can you see? In other words, how much more 

benefit can it be when you have the ability to do telemedicine here? 

I realize every case is different, but I mean just—— 

Dr. DINTIMAN. Well, I think, as she said, these studies have not 

been done, but we’re anxious to do them, pilots and to see what the 

benefits could be. Personally, I think I could see 5 to 10 more patients a day. 

Mr. LUETKEMEYER. Very good. 

Dr. DINTIMAN. And that’s with the effectiveness of evaluating 

them through the applications, through the computer, through the 

details that are provided, because teledermatology is a unique specialty that allows the pictorial view of the disease. 

Mr. LUETKEMEYER. How do you minimize or mitigate the liability 

situation that you have as a doctor when you diagnose someone 

and someone else takes that diagnosis and then administers the 

care? How do you mitigate that? Are you concerned about it at all? 

Dr. DINTIMAN. Of course, our concerns are to protect the physician and protect the patient, ultimately. It is interesting a lot of 

care is already provided via the phone, with very little details, and 

with sometimes misinformation communicated through a phone. 

Whereas, with the use of video or stored forward technology, you’re 

getting so many more details and so much more important information that allows you to you make a very important triage or suggestion to advise the patient to come in, advise the patient to go 

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11 

to the ER. I think that, in many ways, it protects the physician to 

have telemedicine as part of their practice. 

Mr. LUETKEMEYER. Excellent. 

Ms. Basgall, you went at length with regards to the broadband 

problem that is very prevalent in a lot of rural parts of our country. 

And you know, to me this is probably the biggest problem I would 

see other than, perhaps, reimbursement with regards to telemedicine from the standpoint of the benefit it could be to the rural 

areas. Yet, with the barrier of the lack of broadband, in some 

areas, it would seem that would be a huge hurdle. 

I know I live in the rural part of Missouri, and I am barely within a broadband area myself. And so I know there are a lot of areas 

within my own district that do not have broadband. So can you 

speak to that a little bit about the concerns, how you are working 

with providers, maybe some hurdles and some things that perhaps 

we can help you with to be able to enhance that? 

Mr. BASGALL. Sure. Well, Nex-Tech is actually sitting in a very 

good position as far the broadband that we are table to offer our 

customers because of some past RUS loans, because of the 

broadband stimulus grant and loans that we were able to get. We 

were able to build out fiber optics and also WiMAX, a wireless 

technology, to reach several of our customers that are out in a 

rural area, who otherwise had dialup service. 

So I feel like we are sitting in a pretty good position, where we 

can continue to work with those. You are always going to have customers who aren’t in line of sight of a tower and are down in a 

draw or have trees surrounding them, and you just continue to 

work with them and say, what else can we do? Can you look for 

a unique solution for that? Can you put up a pole or put whatever 

might be able to work for them? 

As far as other companies in other areas, I know that it is a 

large issue, and I think a lot of maybe investments that would 

have otherwise been made at this time haven’t been due to the regulatory uncertainty. I believe in the written testimony we have 

some statistics where it talks about the number of RUS loan applicants that were during the first 3 years of the program versus the 

past 3 and how those have dropped tremendously just because people aren’t certain of—it has to be feasible in order to make it work. 

And when it is uncertain, it is difficult to make that happen. 

Mr. LUETKEMEYER. Thank you. 

Dr. McHugh, you talked about licensing across State lines is a 

problem. And I am sure when you practice across the States you 

have to have a license, so when you practice telemedicine across 

State lines, it is a whole new world there of licensing. Can you talk 

about the problems and what kind of solutions you may have? 

Ms. MCHUGH. Sure. This is a bit of a challenge, especially where 

State medical boards have made decisions to limit practice to physicians who are located in the same State as the patients. It really 

limits competition, and it limits the ability for the patients to seek 

care outside of the State lines. 

There are several different approaches that could be used to address this problem anywhere from Federal approaches, where the 

Federal Government decides that we’re going to have sort of a national leadership in term of licensing of telemedicine providers, to 

SBREP-219 with DISTILLER

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keeping this a State responsibility and having States come together 

through some sort of interstate agreement, where one State will 

recognize licensure in another State. 

Mr. LUETKEMEYER. Is there a movement along that line? 

Ms. MCHUGH. There has been some advocacy along that line, but 

there has not been not been a whole lot of groundswell of support. 

I don’t believe that many States have signed on to that yet. 

Mr. LUETKEMEYER. I see I am over my time. 

Thank you, Mr. Chairman. 

Chairman COLLINS. Thank you, Mr. Luetkemeyer. 

I yield to Ranking Member Hahn for her questions. 

Ms. HAHN. Thank you, Mr. Chairman. 

I really appreciate all of your testimony. I learned a lot listening 

to each and every one of you. Some of my questions were already 

asked by Representative Luetkemeyer, but I was thinking along 

the same lines. 

One of the things that comes to my mind is patient privacy. And 

I was going to direct this to Dr. Rheuban, but any of you might 

want to answer that. There has been a high profile case lately of 

a doctor who was found secretly videotaping one of his patients in 

the exam room, and I think that just sort of sends fear through— 

I know women particularly. 

What would be your take on who should design the protocols for 

processing, sending patient information? And can or should the 

Federal Government be involved in helping to regulate telemedicine to ensure patient privacy? 

Dr. RHEUBAN. That is an excellent question. And certainly, all 

HIPAA privacy and security regulations apply to telemedicine providers as well. So I don’t know that we necessarily need to regulate 

even more. The American Telemedicine Association has developed 

practice guidelines and standards. And I believe they should be sufficient, but it is a matter of training; working with industry, working with a provider community, working with the Federation of 

State Medical Boards so that everyone understands where we are 

currently; and then educating providers themselves about the appropriate use of telemedicine. 

Ms. HAHN. Does anyone else have any comments on that? 

Dr. DINTIMAN. Yes. I think that if you go to the ATA meeting, 

the American Telemedicine Meeting, you see that HIPAA compliance and security is of utmost importance. The technology is there. 

The enthusiasm of the scientists that come to these meetings is 

there. 

I think that what we may not realize is already a lot of information is communicated in non-HIPAA compliant ways. And so we 

need to actually channel the physicians and the health care providers to use these various secure systems that have been developed, because I think ultimately that is risk for the patient, but it 

can be overcome. 

Ms. HAHN. Now, Dr. Dintiman, you talked a little bit about how 

it could work in the world of dermatology. And you also mentioned 

possibly a patient in a nursing home with Alzheimer’s. I was wondering how the rest of the doctors could comment on, what do you 

see as good cases for telemedicine? And are there ones that, of 

course, would not ever able to be accommodated by telemedicine? 

SBREP-219 with DISTILLER

13 

I just would like to hear a few more, what are the actual cases you 

think that would be served well by this? 

Ms. MCHUGH. Well, I will just jump in and say that when you 

think about the functionality and the capabilities of telemedicine, 

you know, they cover such a broad range of functions, you know. 

You can have a consultation. You can diagnose. You can do remote 

monitoring. You can even have physician mentoring. 

And so when you think broadly about the scope that telemedicine 

covers, it is really hard to imagine a specialty that couldn’t be 

aided by telemedicine. I mean, you can even think about things beyond traditional specialties. So, for example, I teach a graduate 

health policy course, and one of my students is an emergency physician who wrote a terrific paper on the use of telemedicine for 

EMS, Emergency Medical Services. You can imagine an ambulance 

even going out into the field and getting really expert advice about 

whether to transport a patient and where to transport a patient. 

Dr. RHEUBAN. I don’t think you even need to imagine it, because 

it is already here. So, in our program, we are providing services in 

more than 45 different subspecialties of health care. We do rely on 

our clinicians as to their comfort level of providing the service. We 

have protocols in place that have been developed with the providers 

to be sure we are doing the right thing for the right patient at the 

right time. American Telemedicine Association has many dozens of 

special interest groups that work with the specialty societies. If you 

want some use case scenarios, high-risk obstetrics telemedicine, 

cancer services. We do screening for diabetic retinopathy, acute 

stroke care. In my own speciality of pediatric cardiology, I can use 

a electronic stethoscope and read an ultrasound in the nursery 

where there is a baby that may have low blood oxygen. It is pretty 

much, as Dr. McHugh said, diverse across our specialties. 

Ms. HAHN. Thank you. I know my time is up, but I will say I 

read something which none of you have actually touched on was 

the doctor-to-doctor use of this. And I was reading an example of 

a doctor who had, alone at night, kind of dealing with a case, no 

one was around, and the opportunities of sending to another doctor 

these kinds of video or pictures and having a consultation with another physician. 

Thank you very much. 

Chairman COLLINS. Yes, thank you. 

I would like to now yield to Mr. Coffman for 5 minutes. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

I thank you all for coming here to testify on telemedicine. And 

obviously, my hope and I think the hope of many members of Congress is what can we do to reduces cost and expand access to 

health care. 

So I am wondering if you all could elaborate on I think three 

things: Number one, to what extent have we—what are the frontiers for telemedicine in terms of, what can we still exploit in terms 

of opening access, lowering costs? And then, the second part, what 

are the impediments to do that? Are they cultural within the provider community, or are they regulatory in nature? And then I 

think the third would be just an idea in terms of what it could 

mean to our health care system if we could advance telemedicine 

further in terms of opening up access and reducing cost. 

SBREP-219 with DISTILLER

14 

Dr. Rheuban, why don’t we start with you, please? 

Dr. RHEUBAN. Thank you. 

I think the frontiers are the delivery of care in the nontraditional 

environment, so in the workplace potentially, when people are traveling, many—in the home. We have a lot of cost savings data actually that are available. And as an example, in our own program, 

I mentioned the high-risk obstetrics telemedicine program. We 

have reduced preterm delivery and reduced days in our NICU by 

39 percent. That is a huge cost saver for State Medicaid program 

and for the payer community. 

In stroke, if you can provide timely access to a stroke neurologist 

and appropriate use of clot-busting medication, that saves huge disability, saves lives, and saves—nursing home care. Nursing homes 

are a wonderful place because the challenge of transporting patients, the cost of the Medicare program. 

Remote patient monitoring in the home. We have done about 650 

patients we supported after discharge from the hospital, and we 

have reduced readmission by 50 percent in those patients who 

would have bounced back. So those, again, cost savings. So the 

frontier is being broader in terms of our look-see and how we can 

do it and eliminating some of the regulatory barriers that have limited providers from utilizing these opportunities. 

Mr. COFFMAN. Okay. Thank you. 

Ms. MCHUGH. Mr. Coffman, you had asked whether the barriers 

are more public policy related versus cultural. I would argue that 

they are both. There is certainly a lot that policymakers can do to 

expand the use of telemedicine, but I think that cultural barriers 

are an important one that we haven’t really touched on yet. Work 

and quality improvement has shown for decades that changing 

physician behavior is very, very difficult. But one thing that is very 

much in your purview is to change reimbursement policies. As I 

mentioned, my personal opinion is that expanding telehealth coverage value-based purchasing programs would be a natural and 

next step for that, because under value-based purchasing programs, physicians and hospitals are incentivized to provide highquality care at the lowest cost. In some cases, we know that providers don’t have the flexibility to use telemedicine under these 

programs, even though it could be a very useful tool to improve the 

value of care delivered. 

Mr. COFFMAN. Ms. Basgall. 

Mr. BASGALL. Yes. I would also like to touch on those same lines. 

The frontier in our rural area seems to just be let’s get this started, 

let’s move past just the face-to-face consultations they are currently 

having with—most of it is focused on the mental health side. We 

have a shortage, I think, of mental health psychologists, psychiatrists in our area. So a lot of times the hospitals are using kind of 

an ITV sort of set up for those means. So I think we just need to 

get past that. 

But I think one of the—like you mentioned, cultural, one of biggest barriers is we have an aging population, and that is both doctors and patients. So doctor recruitment will be interesting as they 

are trying get some younger doctors in to focus on, maybe they will 

have a want or a desire to bring in some of this technology. And 

SBREP-219 with DISTILLER

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then also helping our customers understand broadband and bring 

that into their lives a little bit more so. 

Mr. COFFMAN. Dr. Dintiman? 

Dr. DINTIMAN. I would like to focus on the cost saving aspect of 

telemedicine. I really think that if we look at our rehab centers and 

nursing home, how we could bring the care to the patient, instead 

of bringing the patient to an office or an emergency room without 

knowing where they need to be. For example, if we bring the care 

to the patient, we can evaluate a leg ulcer or an early infection 

more quickly and get the care implemented so they do not end up 

a patient that is hospitalized. 

Secondly, I think one of our biggest patient populations is our 

obese and diabetic population that can be monitored through teleophthalmology. They can be monitored through teledermatology. 

They have leg ulcers that are, again, big cost to the health care 

system as well as the other complications of diabetes. So I feel that 

we can see this in many specialties that we bring the care to the 

patient, and the system will save money. 

Mr. COFFMAN. Well, thank you all for your testimony today and 

for working in this frontier I think that has such promise in terms 

of opening up access and lowering costs and hopefully maintaining, 

if not improving, quality. 

Madam Chairman, I yield back—Mr. Chairman. 

Ms. HAHN. I like Madam Chairman. 

Chairman COLLINS. Thank you very much. 

Well, we have timed this fairly well. They have called votes, but 

we still have some time. I would like to ask a few questions to close 

this out. 

On the reimbursement issue, I mean, we talked a lot about Medicare and Medicaid. Dr. McHugh, what about the private insurers? 

Start with the basic question: Do they make the decision themselves whether they reimburse because you have one insurance 

company in an area saying, we will reimburse our doctors for telemedicine, and yet another private insurance company saying no, or 

is this a statewide issue? 

Ms. MCHUGH. So insurers do make the decision themselves. 

However, they have to follow State laws regarding mandated benefits. So some States have laws saying that insurers who offer coverage in their State must offer that particular benefit. 

Chairman COLLINS. So you could have, though, a cutting-edge 

company saying, we’re going do it. 

Ms. MCHUGH. Uh-huh. 

Chairman COLLINS. So if the insurance company can do it, a 

State might mandate it, but in the case of, I think, there are 20 

States, as I understand it, that have a reimbursement policy, but 

that leaves 30 States without one. So, in those States, a private insurer could decide it is good business for them. 

Ms. MCHUGH. Absolutely. We see many insurers being swayed 

by the evidence and going far beyond offering coverage for the services that are mandated. They realize it makes good business sense. 

Chairman COLLINS. So, Ms. Basgell, some rural areas, and certainly mine—I have a very rural area. We have 25,000 to 50,000 

households that don’t have broadband coverage, and part of that 

gets back to the definition of what is an underserved area or not. 

SBREP-219 with DISTILLER

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Have you seen any cases where somebody could have a small, office 

setting, or clinic setting, in a rural area that has broadband, so a 

patient could actually drive 5 miles there and connect at that point 

to a physician that is 50 miles away, almost like a call center? 

Have you seen anything like that? 

Mr. BASGALL. You know, the most that we have seen as far as 

that goes is on the mental health side. And again, I think it goes 

back to some the closest psychologists are, you know, an hour and 

a half, 2 hours away. In my area, I think a lot of people are used 

to driving, and it is maybe not as bothersome to them to go to see 

their doctor physically, rather than online. 

I do think it also goes back to it the aging population and what 

their comfort level is. I think that there are a lot that are just more 

comfortable being there physically, but as we have a younger population coming back to our area, I think that that is starting right 

now. We are seeing a trend where some younger people are moving 

back to their hometowns. I think if that continues, I think that 

that comfort level will rise, and maybe we will see more of that in 

the foreseeable future. 

Chairman COLLINS. We have college kids that may be seeing, for 

various reasons, a mental health professional at home. They developed a relationship with that person. They go off to college. Maybe 

they are back and forth. It would appear that would be a very appropriate use. You can’t just say to a college student in another 

State, because of licensing procedures, you have to start a new relationship. Would anyone like to comment on that? 

Dr. RHEUBAN. That is absolutely a perfect use case and example 

of why the lack of licensure portability can be a challenge. That 

provider that is caring for that student would have to have a license to practice medicine in that State. 

Now the Federation of State Medical Boards is moving forward 

with an interstate compact to try to expedite the licensure process, 

but it is still going to be time consuming. And we look to seeing 

how quickly and how expedited this process will be. Your example 

is a perfect example about why we need some broader vision in 

that regard. 

Chairman COLLINS. Would any of you like to comment? 

Dr. McHugh, is that a proper role, perhaps, for the Federal Government? I think some of us would say we defer to the 10th 

Amendment and States’ rights. I, for one, am very reluctant to ever 

step in with a Federal policy or support of Federal policy that 

tramples on States rights. But you know, we seem to be in this 

telemedicine quandary of 20 States have reimbursement policies; 

30 States don’t. The licensing issue was brought to bear recently 

with a football physician who was treating his team in another 

State, and a player sued him. That brought that to the forefront. 

Is this one where perhaps some Federal statutes could give some 

limited coverage? 

Ms. MCHUGH. I think so. Certainly the Federal Government coming in and taking over this responsibility does introduce some 

issues with federalism. However, as a consumer and a parent, I 

want high quality care. And whether it is the Federal Government 

who shows leadership or State governments who show leadership, 

SBREP-219 with DISTILLER

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if States aren’t going to act, I would like to see the Federal Government act. 

Dr. RHEUBAN. I would like to point out there are 50 different 

State Medicaid programs with all different regulations as well. And 

that is a major challenge for our patients, especially as we see 

more insured patients under the Medicaid program. So I would certainly be supportive of greater oversight when it comes to medicaid 

programs and telemedicine as well. 

Chairman COLLINS. It almost seems like you could have some exceptions for existing patient relationships to avoid that. I am from 

western New York. A lot of our older population goes south for 3 

months to Florida. There is another case; they have the relationship. It is not a New York doctor poaching in the Florida area for 

clients, but rather an existing client relationship, much like the college student and so forth. 

Do you ever think you could see something where there would be 

protections and/or licensing granted to existing patient-doctor relations different than a new patient? Is that even a possibility? 

Dr. DINTIMAN. I think that that is very doable and especially to— 

some of the States have a specific telemedicine license. It doesn’t 

give you full access, but you do have the ability to treat patients 

across lines. 

And I just wanted to remind us that there are many States that 

have—there is a huge shortage of pediatric specialties, such as pediatric rheumatology and endocrinology. There are whole States 

that don’t have one pediatric rheumatologist. I think those people 

should have the ability to have a telemedicine consult, even if there 

is not an existing relationship. 

Chairman COLLINS. I think our time has come to an end. I have 

other questions, but I think what we have seen here is common 

sense. We would like to think that common sense should carry the 

day. And technology has now moved to us a place we can better 

serve an aging population or a rural population where we know 

there is going to be a shortage of doctors. There is already a shortage of specialties. There are many mental health professionals that 

are doing concierge medicine; they don’t even take insurance. I 

know in the dermatology profession, especially, you can wait 18 

months to get—they call it an annual skin check, but they should 

now call it an 18-month skin check. So I think common sense says 

we need to move it forward. If a doctor doesn’t get paid, they are 

not going to be participate, so reimbursement. The licensure issues. 

No one wants to be put in a position of not complying with the laws 

relative to their license or, in some cases, their own liability insurance policies. 

So what our purpose was today, and I think we accomplished it, 

was to start a discussion. I think this is only the second hearing 

in Congress on telemedicine. It is messy with State laws. It is 

messy with Medicare and Medicaid and different practices and existing relationships and so forth. But if we don’t start the discussion at some point—and we are seeing a hodgepodge of things move 

forward State by State. 

So, again, your testimony was quite timely. We appreciate all of 

your comments and hope that this discussion is helpful to those of 

us who just want to move forward in a common sense direction. 

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I ask unanimous consent of members that we have 5 legislative 

days to submit statements and supporting materials for the record. 

And with no objection, that is so ordered. 

The hearing is now adjourned. 

[Whereupon, at 11:02 a.m., the subcommittee was adjourned.] 

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A P P E N D I X 

Testimony before the Committee on Small Business Subcommittee on Health and Technology 

July 31, 2014 

Karen S. Rheuban MD 

Professor of Pediatrics 

Director, University of Virginia Center for Telehealth 

P.O. Box 800711 

University of Virginia Health System 

Charlottesville, Virginia, USA 22908 

Krheuban@virginia.edu 

434–924–2481 (phone) 

434–982–1415 (fax) 

Chairman Collins, Ranking Member Hahn, members of the Subcommittee on Health and Technology, thank you for the invitation 

to provide testimony regarding the opportunities and challenges for 

small medical practices seeking to incorporate telehealth into everyday practice. My name is Dr. Karen Rheuban, and I direct the 

Center for Telehealth at the University of Virginia. I am the Principal Investigator of the federally funded Mid Atlantic Telehealth 

Resource Center, a past president of the American Telemedicine 

Association and Board Chair of the Virginia Telehealth Network. 

I also have the privilege of serving as Board Chair of the Virginia 

Department of Medical Assistance Services (Medicaid). Although 

the focus of my testimony relates to opportunities for and barriers 

to the use of telehealth at the provider level, it is also important 

to note there are parallel implications for small business development in sectors such as telemedicine services companies and technology innovation. 

‘‘Telemedicine’’ is defined as the practice of medicine using electronic communications, information technology or other means between a provider in one location, and a patient in another location. 

Generally, telemedicine is not an audio-only telephone conversation, e-mail/instant messaging conversation, or fax. Telemedicine is 

not a new specialty, a new procedure or a new clinical service but 

rather, technology designed to enable the provision of healthcare 

services at a distance. 21st Century telemedicine services can be 

provided live, via high definition interactive videoconferencing supported by peripheral devices, or provided asynchronously, using 

store and forward technologies, or through the use of remote patient monitoring tools. 

Telemedicine has been demonstrated to mitigate many of our nation’s significant challenges including disparities in access to care, 

healthcare workforce shortages, and geographic mal-distribution of 

providers. Telemedicine improves patient triage, clinical outcomes, 

reduces the burden of travel for care, and fosters more timely access to care. Telemedicine tools support patient engagement and 

self-management where appropriate, and, as supported by extenSBREP-219 with DISTILLER

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1Lustig, Tracy A. The role of telehealth in an evolving health care environment: workshop 

summary. National Academics Press, 2012. 2Schwamm, Lee H., Heinrich J. Audebert, Pierre Amarenco, Neale R. Chumbler, Michael R. 

Frankel, Mary G. George, Philip B. Gorelick et al. ‘‘Recommendations for the Implementation 

of Telemedicine Within Stroke Systems of Care A Policy Statement From the American Heart 

Association.’’ Stroke 40, no. 7 (2009): 2635–2660. 3Kvedar, Joseph, Molly Joel Coye, and Wendy Everett. ‘‘Connected health: A review of technologies and strategies to improve patient care with telemedicine and telehealth.’’ Health Affairs 

33, no. 2 (2014): 194–199. 

sive evidence published in the peer-reviewed literature, improves 

clinical outcomes, and lowers the cost of care 1,2. 

Vetted by and in collaboration with the relevant specialty societies, the American Telemedicine Association has developed and 

published practice guidelines designed to ensure best practices in 

telemedicine that ensure high quality care. 

Examples of telehealth supported care include: 

• Remote diagnosis of stroke with timely use of thrombolytic 

(clot busting) agents to reduce morbidity and mortality, improve patient outcomes, and lower overall costs of care; 

• Delivery of telemedicine supported obstetrical services to 

women at high risk for complicated pregnancies ultimately resulting in improved clinical outcomes, lessened infant mortality 

rates, reduced days in neonatal intensive care and lower costs 

of care; 

• Regular ophthalmologic screening of patients with diabetes 

for retinopathy, the number one cause of blindness in working 

adults; 

• Better management of chronic illness such as heart failure, diabetes, hypertension, chronic obstructive pulmonary disease; 

• Improved access to cancer screening tools, collaborative diagnosis through virtual tumor boards and even remote access 

to clinical trials; 

• Access to mental health services for children and adults to 

include emergency psychiatry services; 

Telemedicine supports an integrated systems approach focused 

on disease prevention, enhanced wellness, chronic disease management, decision support, improved efficiency, quality and patient 

safety.3

Opportunities for small practices to adopt telehealth relate to the 

model they wish to deploy and the credentials of the provider. Primary care providers can serve as ‘‘originating sites’’ so as to connect their patients to specialists, they may offer direct-to-consumer 

services for their own patients, they may choose to serve on panels 

for telemedicine services companies offering direct-to-consumer 

services for their own patients or others, and/or they may engage 

in remote patient monitoring services for chronic disease management for their patients. Specialty care providers may serve as consulting ‘‘distant site’’ providers to provide consultative services and 

follow up visits either through their offices or at the hospital. Specialists may also serve as ‘‘originating sites’’ to connect to other 

providers. They may offer services live using videoconferencing 

SBREP-219 with DISTILLER

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4 Institute of Medicine, Committee on the Future of Rural Health Care. ‘‘Quality through collaboration: The future of rural heath care.’’ (2014). 

technologies or through store and forward applications. Specialty 

care providers may choose to serve on panels of consultants for 

telemedicine services companies, offer direct-to-consumer services 

for their patients or for payers and telemedicine services companies, and participate in remote patient monitoring models. Regardless of the model chosen, is imperative that willing providers take 

into consideration all relevant federal, state, specialty society policies and best practices that impact telehealth practice. 

A) Rural healthcare: 

Although rural communities face the same basic challenges in access, quality and costs as their urban counterparts, they do so at 

far greater rates, attributable to a host of factors. ‘‘Core health care 

services’’ as defined by the Institute of Medicine as primary care, 

emergency medical services, long term care, mental health and 

substance abuse services, oral health and other services are considerably less accessible in rural communities.4 Where local specialty 

care services are not available, particularly in rural and underserved regions and health professional shortage areas, telemedicine 

offers timely access to care and spares patients the burden of long 

distance travel for access to that care. 

Rural communities lack sufficient patient volumes to support 

specialty and subspecialty practices. Primary care providers are 

often overwhelmed with complex patients with acute and chronic 

illness. Telehealth technologies offer ready access to critical services when rural providers partner with tertiary and quaternary 

care facilities. 

Attracting health professionals to rural communities remains a 

daunting task and retaining those health professionals to practice 

in rural communities is all the more difficult. Rural healthcare providers generally work longer hours, see more patients and have 

grater on-call demands because of lack of cross coverage opportunities. Strategies to recruit and retain clinicians to practice in rural 

and frontier communities must include applications that enhance 

the management of patients with acute and chronic illness, and reduce the chronic sense of isolation experienced by those practitioners by affording enhanced connectivity to colleagues, and educational opportunities. 

Telehealth should be viewed as integral to rural development. 

More than 90% of patients seen through our UVA telemedicine program remain within their community healthcare environment, resulting in a reduction of unnecessary transfers, and thereby contributes to the economic viability of community hospitals. 

B) Urban healthcare 

Although the challenges of unfavorable geography and distance 

tend to be uniquely rural, socioeconomic issues, health disparities, 

and other serious barriers to access to quality healthcare are equally compelling in urban areas. Poverty, unhealthy behaviors and adSBREP-219 with DISTILLER

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5https://www.aamc.org/download/385178/data/ 

aamclettertocongressionalconfereesonveteranaffairslegislation.pdf 

verse health status indicators are as prevalent in the shadow of our 

finest urban academic health centers as they are in rural communities. Isolated, vulnerable urban patients also suffer from high 

rates of chronic illness, and for whom a bus ride across town can 

be as challenging as is a long ride for rural patient. 

C) Workforce 

It is widely accepted that our nation faces a shortage of physicians and other health professionals which is anticipated to worsen 

with our aging population, higher rates of chronic illness, and 

greater numbers of covered individuals seeking care following the 

implementation of the Affordable Care Act. The Association of 

American Medical Colleges (AAMC) in a recent communication 

with the Committee on Veterans Affairs reported an estimated 

shortage of 46,000 primary care physicians and 45,000 specialists 

by 2020.5 The incorporation of telehealth technologies into integrated systems of care offers tools with great potential to address 

some of the challenges of access, specialty shortages, and changing 

patient needs both in the rural and urban setting. 

The aging of our population has already created increased demand for specialty healthcare services to address both acute and 

chronic disease in the elderly. Such a demand, in the face of anticipated provider shortages, requires a fundamental shift from the 

model of physician centered care to one focused on patient centered 

care using interdisciplinary teams, evidence based medicine, the 

use of informatics in decision support and telehealth technologies 

when specialty care services are not locally available. Home telehealth and remote monitoring in the arena of chronic disease management improves care and prevents hospital readmissions. 

To facilitate this paradigm shift, it is imperative that we train 

a broad spectrum of health professionals to deliver 21st Century 

healthcare facilitated by telehealth technologies. 

D) Example: The University of Virginia Center for Telehealth 

The UVA Telemedicine program serves as an example of both 

traditional and innovative applications in telehealth. Our Center 

for Telehealth was established initially as the Office of Telemedicine in 1996. Since the establishment of our program, we have developed collaborations and agreements connecting the UVA Health 

System with 128 sites across the Commonwealth using high definition video-teleconferencing, store and forward technologies, remote 

patient monitoring and mobile health applications to improve access to healthcare services for the citizens of the Commonwealth. 

We connect with hospitals, clinics, health centers, community service boards, medical practices, correctional facilities, skilled nursing 

facilities and emergency medical services. Our telemedicine program has reduced the burden of travel for Virginians by more than 

9 million miles, saved lives and fostered innovative models of care 

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6Veith, Sharon T et al, ‘‘Perinatologists and Advanced Practice Nurses Collaborate to Provide 

High Risk Prenatal Care in Rural Virginia Communities.’’ In Association of Women’s Health, Obstetric and Neonatal Nurses (June 14–18), 2014). AWHONN, 2014. 

delivery and workforce development. We have launched a care coordination and remote patient monitoring program designed to reduce hospital readmissions, and to manage chronic disease in the 

community setting. UVA telemedicine supported clinical care spans 

the continuum from prenatal services, to acute care consultations 

and follow up visits, to chronic disease management and palliative 

care. We have leveraged these efforts to also expand broadband 

communications services in rural regions of the Commonwealth. 

The UVA Telemedicine program has received funding from 

HRSA, USDA, the Department of Commerce, and the Rural 

Healthcare Support Mechanism of the Federal Communications 

Commission. We have worked with our colleagues at the Centers 

for Medicare and Medicaid Services, and with the Institute of Medicine to help advance the implementation of policies that allow for 

innovation, sustainability and high quality patient care. In 2010, 

the Center was awarded a federal grant to serve as the Mid Atlantic Telehealth Resource Center (MATRC) to provide technical assistance to providers, healthcare systems, state governments and 

other entities in eight states and the District of Columbia. 

The Center for Telehealth has also worked closely with all relevant agencies of the Commonwealth of Virginia to help build our 

telemedicine network, to pilot innovative applications, and to ensure sustainability through sound state public policy collaborations 

that integrate telehealth into mainstream healthcare in the Commonwealth. These efforts led to broad reimbursement by Virginia 

Medicaid in 2003 and in 2010, a legislative mandate for parity 

third party payment. 

Our Center for Telehealth tracks a host of metrics to include 

process metrics for emergency care (time from consult request to 

completion of encounter), process metrics for non-emergency services which are compared to traditional face to face services, clinical 

outcomes metrics, hospital readmissions rate, miles of travel avoided, comparisons to national benchmarked telemedicine programs, 

patient satisfaction, and other organizational metrics. 

Examples of UVA telemedicine clinical outcomes metrics include: 

a) High-risk obstetrics telemedicine in which we compared 

traditional face to face care with care provided via telemedicine 

to 374 high risk pregnant women. We have documented a reduction in NICU hospital days for the infants born to these patients by 39% compared to control patients, reduced patient noshows by 62% and reduced patient travel by these pregnant 

women by 162,000 miles.6

b) In partnership with BroadAxe Care Coordination, remote 

patient monitoring tools have been deployed to prevent hospital readmission and have been an effective tool for patients 

with heart failure, acute myocardial infarction, chronic obstructive pulmonary disease, and pneumonia, reducing all cause 30 

day readmissions by 45%. 

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7Doarn, Charles R., Sherilyn Pruitt, Jessica Jacobs, Yael Harris, David M. Bott, William 

Riley, Christopher Lamer, and Anthony L. Oliver. ‘‘Federal Efforts to Define and Advance Telehealth—A Work in Progress.’’ TElemedicine and e-Health 20, no. 5 (2014): 409–418. 

c) Store and forward ophthalmologic screening for retinopathy, the number one cause of blindness in working adults has 

been provided to underserved adults with diabetes. Over two 

years, 1736 screens have been performed, with 802 abnormal 

patients identified (46%) as being at risk for blindeness. 

d) Remote patient monitoring tools have been used to reduce 

the burden of diabetes in the community setting. All clinical 

metrics tracked (Hgb A1c, fasting blood sugar and blood pressure) have had impressive reductions in the range of 9–10%. 

e) More than 2000 patients have participated in the videobased interactive patient education programs of our diabetes 

community network. 

E) Issues for consideration: 

Despite the federal government and private industry’s multi-billion dollar investment in telemedicine, broadband expansion and 

health information technologies, disappointingly, efforts to promulgate continued integration of telemedicine remain stifled by 20th 

Century federal and state barriers to more widespread adoption. If 

challenging to large healthcare systems such as ours, it follows naturally that despite great promise, these obstacles create significant 

challenges for small medical practices seeking to use telehealth 

tools. Larger systems can draw upon the expertise of contract attorneys, information technology specialists, a robust billing staff, electronic medical records and picture archiving and communications 

services, credentialing and privileging staff, and other support systems to help facilitate telehealth integration. 

Currently, 26 different federal agencies report engagement in 

telehealth, be it through research or other grant funding opportunities, the establishment of broadband communications networks, 

clinical service delivery, device development and regulation, and 

other interests. The Fed-Tel working group efforts to coordinate 

telehealth policy has made some progress, however, there still remains a serious lack of coordination of practical policies across 

these agencies in part because of statutory barriers.7

As an example: mal-aligned federal definitions of rural have resulted in federal grant support for telemedicine technology and 

broadband connectivity deployed to certain clinics and hospitals eligible for funding according to those agency definitions of rural, but 

sustainability is thwarted by statutory barriers that deny Medicare 

reimbursement because of a more limited Medicare definition of 

rural and other originating site restrictions. Inconsistent state policies and regulations create additional barriers for otherwise willing 

providers seeking to integrate telehealth into care delivery models. 

1) Reimbursement 

a) Medicare: 

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8Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) section 

223(d). 9Grabowski, David C., and A. James O’Malley. ‘‘Use of telemedicine can reduce hospitalizations of nursing home residents and generate savings for medicare.’’ Health Affairs 33, no. 2 

(2014): 244–250. 

Payment coverage restrictions remain a major impediment to the 

broader adoption of telehealth by providers. Congress, in 1997, 

through the Balanced Budget Amendment, and in 2000, though the 

Benefits Improvement and Protection Act (BIPA), authorized the 

Center for Medicare and Medicaid Services (CMS) to reimburse for 

telehealth services provided to rural Medicare beneficiaries across 

a broad range of CPT codes and services. However, the current 

Medicare telehealth provisions in the Social Security Act 1834(m), 

enacted in 2000, have not kept pace with advancements in technology, and more than a decade of best practices and outcomes research. In the Act, Congress, directed CMS to study and report opportunities to expand coverage within two years. Fourteen years 

later, no such report has been produced.8

The Affordable Care Act did not expand eligible originating sites 

in the traditional Medicare program in part because of adverse 

scoring by the Congressional Budget Office that failed to take into 

account services provided in lieu of face to face care, and Medicare 

savings accrued by patient monitoring programs. Pilot programs 

have been launched through the Center for Medicare and Medicaid 

Innovation that include remote patient monitoring. The regulations 

for Accountable Care Organizations still require the patient originating site to conform to the regulations set forth in Section 

1834(m) without flexibility to include providers serving patients living in metropolitan communities across the nation including patients in nursing homes.9 These statutory barriers placed on telehealth programs are borne out by the meager reimbursements reported by CMS for telemedicine services. In 2013, CMS reported 

fewer than $12 million dollars in reimbursements for ‘‘allowable charges’’ NATIONWIDE which include distant site and 

originating site fees. (Attachment A: CTEL). Although physician 

offices and community based clinics are ideal originating sites for 

telemedicine encounters, the current Medicare originating site payment ($24.63) is insufficient to cover the costs of establishing and 

maintaining a telemedicine services. In its 2014 physician payment 

schedule, CMS expanded its operating definition of rural from nonmetro counties only to also include those regions defined as rural 

by the Office of Rural Health Policy. 

b) Medicaid: 

Currently 47 state Medicaid programs provide some form of reimbursement for the delivery of telehealth facilitated care to Medicaid beneficiaries. However, there is no consistency in telehealth 

coverage across the Medicaid programs, despite clear needs of patients served by our Medicaid programs and in the face of coverage 

expansion post implementation of the Affordable Care Act. Most 

Medicaid programs pay for transportation of patients and yet, in 

many states, there are still considerable limitations on coverage for 

telehealth services. In 2013, Virginia Medicaid expended $70 milSBREP-219 with DISTILLER

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10 Communication with Hazelton, A., Virginia Department of Medical Assistance Services, 

July 2014. 11 Communication: Nelson, J, Virginia Department of Medical Assistance Services, July 2014. 12http://www.fsmb.org/Media/Default/PDF/FSMB/Advocacy/FSMB—Policy.pdf. 13 REPORT 7 OF THE COUNCIL ON MEDICAL SERVICE (A–14) Coverage of and Payment 

for Telemedicine, June, 2014. 

lion dollars on non-emergency transport of Medicaid beneficiaries.10

A consistent federal-state approach to Medicaid payment for telehealth services would provide cost-savings both in operations costs 

(transportation) and more importantly, in access to care and models of care delivery. Virginia Medicaid has taken many positive 

steps integrating telehealth for its beneficiaries, and since 2003, 

has provided telehealth coverage for urban and rural beneficiaries. 

Virginia Medicaid covers live-interactive video based consultations 

and follow-up care for all Medicaid enrollees. Our Medicaid program has begun to cover certain store-forward services by Medicaid 

providers, and has integrated remote patient monitoring for our 

(urban and rural) dual enrollees, the most vulnerable and costly 

patients we serve, though our newly launched pilot with CMS 

‘‘Commonwealth Coordinated Care’’. Virginia Medicaid has also expanded the list of eligible providers and services beyond the eligible 

providers in Medicare. Medicaid coverage decisions requested by 

providers are analyzed based on clinical need, technical viability of 

the service, models supported by other payers, support of professional organizations, establishment of protocols, costs, and risk of 

fraud and abuse. In 2013, Virginia Medicaid reported reimbursements of $570,000 for more than 10,000 telemedicine claims in the 

fee for service and managed care programs.11

c) Private pay: 

Twenty-one states plus the District of Columbia require that private insurance cover telehealth services. These states are: Arizona, 

California, Colorado, Georgia, Hawaii, Kentucky, Louisiana, Maine, 

Maryland, Michigan, Mississippi, Missouri, Montana, New Hampshire, New Mexico, Oklahoma, Oregon, Tennessee, Texas, Vermont, 

Virginia, and the District of Columbia. Some of the commercial 

payers support payment for telemedicine services even in the absence of a state mandate. Others have developed or adopted directto-consumer models as either a benefit to members, or an additional payment option. 

d) Other models: 

A number of telemedicine services companies have developed 

models to provide contractual services to hospitals, correctional facilities and other entities, by recruiting individual physician providers and contractually fully managing the interface between physician, hospital and patient (examples: Specialists on Call®, Insight 

Telepsychiatry®). Other companies contract with payers or directly 

with patients in direct to consumer model (examples: Teladoc®, 

American Well®, MD Live®) and offer services via video-based encounters and telephone services to the home, workplace or travel 

locations. The Federation of State Medical Boards 12 and the American Medical Association 13 have issued recent policy documents 

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and guiding principles to ensure patient safety, quality of care, privacy of patient information, protecting the patient-physician relationship while promoting improved care coordination and communication with medical homes. 

2. Boards of Medicine policies: 

Inconsistent board regulations across the states and territories 

have led to continued confusion for practitioners. Some state boards 

have adopted positions of opposition to the mainstream adoption of 

telehealth requiring an in-person visit prior to any subsequent telehealth encounters. We applaud the Federation of State Medical 

Boards, for its April, 2014 Report Appropriate Regulation of Telemedicine (SMART) Workgroup report. This report, ‘‘Model Policy for 

the Appropriate Use of Telemedicine Technologies in the Practice of 

Medicine’’ establishes a framework and common language for adoption by the states.12 As stated by the FSMB, ‘‘this new policy document provides guidance to state medical boards for regulating the 

use of telemedicine technologies in the practice of medicine and 

educates licensees as to the appropriate standards of care in the 

delivery of medical services directly to patients via telemedicine 

technologies. It is the intent of the SMART Workgroup to offer a 

model policy for use by state medical boards in order to remove 

regulatory barriers to widespread appropriate adoption of telemedicine technologies for delivering care while ensuring the public 

health and safety.’’ Notably, this working group provided guidance 

to the Boards of Medicine that an initial telemedicine encounter 

(live interactive video based or store and forward) can indeed establish a bona-fide doctor patient relationship so long as the encounter 

conforms to current standards of practice. Indeed, our experience 

and that of others supports that concept. Timely access to care is 

a key driver of telemedicine programs....as an example, it is highly 

unlikely that any acute stroke victim might pre-emptively have 

scheduled an in person visit with a stroke neurologist prior to suffering his/her first stroke. We rely upon our clinicians and their respective specialty societies to determine the wisdom and need for 

an initial in-person visit when developing our telehealth protocols. 

The SMART Working group also established additional guidelines for the Boards that address informed consent, privacy and security of patient records, patient choice, prescribing, licensure, continuity of care and access to emergency care. In particular, the 

FSMB model policy clearly states that prescribing as a result of a 

telemedicine encounter should follow all current standards of practice in terms of indications, appropriateness and safety considerations. 

3. Credentialing and Privileging 

Credentialing and privileging are important elements of telehealth practice so as to ensure patient safety, quality and that appropriate services are provided by the appropriately credentialed 

provider. Telehealth has been incorporated into the Joint Commission standards beginning in 2000 and in their revised standards of 

2004. In 2011, after extensive deliberations with telehealth proSBREP-219 with DISTILLER

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14http://www.ofr.gov/OFRUpload/OFRData/2011-10875—PI.pdf. 15https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/ 

MLNProducts/downloads/Fraud—and—Abuse.pdf 

viders, CMS published much welcomed new regulations in its hospital Conditions of Participation standards to address credentialing 

and privileging to include proxy arrangements so as to further facilitate the delivery of telemedicine services across the nation.14

Despite this progress, there remain delays in the credentialing and 

privileging processes, and confusion amongst practitioners and hospitals regarding roles and responsibilities to include the requisite 

sharing of quality data. 

4. Licensure 

State medical licensure is a slow, costly and cumbersome process 

for providers who wish to offer services through telemedicine to patients physically located in other states. The process of securing 

multiple licenses is time consuming at its best, with requirements 

for extensive primary source verification, an application and fee for 

licensure in the states in which the provider might wish to evaluate and treat patients. So as to ensure the ability of the Boards to 

respond to complaints and enforce actions against providers, in response to requests for licensure portability, in April, 2014, the Federation of State Medical Boards (FSMB) developed an expedited licensure process. As compared to true licensure portability, as has 

been applied in the Nurse Compacts and as proposed in legislative 

proposals, this new process still risks being time consuming and 

costly to providers. Nonetheless, the FSMB expedited licensure proposal is an improvement over current licensure policy. 

5. Stark and Anti-kickback laws 

Providers and healthcare systems must be aware of the implications of the Stark and Anti-kickback laws when considering models 

for acquisition of telehealth equipment and technology. As reported 

on the CMS website, ‘‘the Anti-Kickback Statute (42 U.S.C. Section 

1320a–7b(b) makes it a criminal offense to knowingly and willfully 

offer, pay, solicit, or receive any remuneration to induce or reward 

referrals of items or services reimbursable by a Federal health care 

program.15 Where remuneration is paid, received, offered, or solicited purposefully to induce or reward referrals of items or services 

payable by a Federal health care program, the Anti-Kickback Statute is violated. 

The Physician Self-Referral Law (Stark Law) (42 U.S.C. Section 

1395nn) prohibits a physician from making a referral for certain 

designated health services to an entity in which the physician (or 

an immediate member of his or her family) has an ownership/investment interest or with which he or she has a compensation arrangement, unless an exception applies.’’ 

Both these statutes must be considered as important risks for 

telemedicine providers or entities who ‘‘purchase, lease, order, or 

arrange for or recommend the purchasing, leasing, or ordering of 

any good, facility, service, or item for which payment may be made 

in whole or in part under a federal health care program......Health 

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16 Ali, S. http://ctel.org/wp-content/uploads/2011/12/CTeL-The-Practice-of-Telemedicine-The-Impact-of-Stark-and-Anti-Kickback.pdf 17FCC Report and Order, Order on Reconsideration and further Notice of Proposed Rule Making, Federal Register: January 22, 2004 Volume 69, Number 14 18Thomes, Cynthia, ‘‘The National Broadband Plan: Connecting America. Administered by the 

Federal Communications Commission, 445 12th Street SW, Washington, DC 20554. Retrieved 

October 15, 2010, from http://www.broadband.gov.’’ (2011): 435–436. 19http://www.usac.org/rhc/tools/news/default.aspx?pgm=telecom 

care providers must take utmost precaution and care in developing 

processes and procedures to implement telemedicine programs to 

avoid liability under the Stark and Anti-Kickback statutes.’’.16

6. Broadband availability: 

The Rural Healthcare Program of the Federal Communications 

Commission’s Universal Service Fund was established following the 

passage of the Telecommunications Act of 1996. This program has 

been extraordinarily useful in expanding broadband services for eligible entities located in rural areas by providing discounts for ongoing connectivity that compare to those rates available to urban providers. Unfortunately as compared to the e-Rate, High Cost, and 

Low Income programs, the Rural Healthcare Programs have not 

fully met their Commission defined funding cap because of onerous, 

complex application processes, and statutory exclusions to eligibility that do not always align with health disparities. In the Telecommunications Program, as an example, for profit hospitals, initially considered ineligible entities, may receive funding support for 

connectivity to the Emergency Department but other connections 

within that hospital are not eligible, even if that hospital is the sole 

provider in a rural county.17

Other ineligible entities include emergency medical services providers and skilled nursing facilities. For-profit clinics and solo practices are not eligible for support. Good faith efforts by the FCC to 

expand within their statutory authority, has led to somewhat 

broader use of the Telecommunications Program. The FCC Pilot 

Program and the Health Care Connect Fund, allows, through consortia, collaborations that may include urban providers. Chapter 

10, Healthcare, of the National Broadband Plan, outlined important 

steps to integrate broadband communications services into sustainable models of healthcare delivery.18

Despite significant outreach efforts, through 2012, utilization of 

the fund still remains less than 30% of the funding cap established 

by the Commission after passage of the Telecommunications Act of 

1996. Total funding commitments reported on the Rural Healthcare 

website through June 2012 were $114,123,355 of which 

$47,723,468.67 were allocated to providers in Alaska.19

The cumbersome and time consuming application process and 

confusing regulations surrounding the rural healthcare programs 

remain a disincentive for participation by individual providers and 

small practices even if they otherwise meet the eligibility requirements set forth in the Act. 

7. Patient Privacy and Disclosure 

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20Skype Statement: onlinetherapyinstitute.com/2011/03/videoconferencing-secure-encryptedhipaa-compliant/ 21http://caltrc.org/wp-content/uploads/2014/01/HIPAA-for-TRCs-2014.pdf 12FSMB 

Providers must ensure that any telemedicine collaboration conform fully to the regulations of the Health Insurance Portability 

and Accountability Act (HIPAA). As with in-person healthcare, providers have a duty to maintain confidentiality and security of patient data. Where a technical staff is included in the healthcare 

team at both originating and distant sites, and with the additional 

components of technologies and communications service providers, 

it is imperative that providers pay special attention and adhere to 

both the privacy and security elements of the HIPAA regulations. 

The HIPAA Omnibus Rule requires that providers and their 

healthcare associates have in place a Business Associate Agreement (BAA) when interactions include protected health information. Business associates include entities that create, receive, maintain, or transmit protected health information to perform certain 

functions on behalf of a covered entity. They also include subcontractors of the business associate delegated a function, activity, 

or service in a capacity other than as a member of the business associate’s workforce. HIPAA also requires the covered entity be able 

to conduct audit trails to ascertain the presence of breaches which 

is not readily available with certain video based applications. As an 

example, in 2011, Skype issued the following statement: 

‘‘Skype is not a business associate subject to HIPAA, nor have we 

entered into any contractual arrangements with covered entities to 

create HIPAA-compliant privacy and security obligations. Instead, 

Skype is merely a conduit for transporting information, much like 

the electronic equivalent of the US Postal Service or a private courier. Skype does not use or access the protected health information 

(PHI) transmitted using our software. However, Skype has implemented a variety of physical, technical and administrative safeguards (including encryption techniques) aimed at protecting the 

confidentiality and security of the PHI that may be transmitted 

using Skype’s calling and video calling products.’’20

Many practitioners are unaware of the complex nuances of these 

regulations as they relate to telemedicine and do not have in place 

the legal infrastructure to assist them in managing the additional 

regulations that govern telehealth practice.21

8. Informed consent 

Informed consent is a requisite element of all healthcare encounters. Telehealth practice adds additional layers of disclosure, to include authentication of the identity and location of the patient and 

provider, provider credentials, and delivery systems utilized during 

the encounter. In addition, providers must have in place an emergency plan should the clinical situation warrant a higher level of 

care, and a plan for care in the event of technology failure and all 

should be disclosed to the patient as a component of the consent. 

The FSMB Model Policy makes the following recommendations 

regarding Informed Consent.12

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22Krupinski, Elizabeth A., and Jordana Bernard. ‘‘Standards and Guidelines in Telemedicine 

and Telehealth.’’ In Healthcare, vol. 2, no. 1, pp. 74–93. Multidisciplinary Digital Publishing Institute, 2014. 

‘‘Appropriate informed consent should, as a baseline, include the 

following terms: 

• Identification of the patient, the physician and the physician’s 

credentials; 

• Types of transmissions permitted using telemedicine technologies (e.g. prescription refills, appointment scheduling, patient 

education, etc.); 

• The patient agrees that the physician determines whether or 

not the condition being diagnosed and/or treated is appropriate for 

a telemedicine encounter; 

• Details on security measures taken with the use of telemedicine technologies, such as encrypting data, password protected 

screen savers and data files, or utilizing other reliable authentication techniques, as well as potential risks to privacy notwithstanding such measures; 

• Hold harmless clause for information lost due to technical failures; and 

• Requirement for express patient consent to forward patientidentifiable information to a third party.’’ 

9. Standards and Practice Guidelines: 

The American Telemedicine Association and its >2500 member 

supported Special Interest Groups, Committees and Discussion 

groups have developed standards to address technical applications, 

and clinical practice guidelines, many of which have been endorsed 

by specialty societies.22

These standards and practice guidelines extend beyond the practice guidelines that currently exist for traditional healthcare. The 

development of standards and guidelines, addressing both interoperability (such as HL 7, DICOM, or H.320, 323, 324, compression 

standards for videoconferencing) and specialty specific applications 

(such as teleophthalmology or telepathology), will increase 

functionality related to and acceptance of advanced technologies 

applied to healthcare. The Special Interest Groups of the American 

Telemedicine Association have worked collaboratively with the clinical specialty societies to develop practice guidelines in telehealth 

that conform to accepted standards of care. These guidelines are 

developed after careful review of the evidence, and in consultation 

with the specialty societies. Examples include teleophthalmology, 

teledermatology, telemental health, tele-ICU, home telehealth, telerehabilitation, and telepathology. Practice guidelines and standards 

guide providers and payers in models of best practice, informed by 

the evidence. 

10. Provider education, technical support and training 

Training programs in telehealth are important additional elements of health professional education and include the appropriate 

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23http://www.americantelemed.org/docs/default-source/policy/examples-of-research-outcomes--- 

telemedicine’s-impact-on-healthcare-cost-and-quality.pdf 

use of telehealth technologies, board regulations, relevant standards and guidelines, interprofessional models of practice enhanced 

by telehealth, and specific training to operate and troubleshoot 

videoteleconferencing equipment, devices and patient monitoring 

tools. The American Telemedicine Association offers certification 

for certain for-credit programs, and others have developed hybrid 

on-line and hands on training. With HRSA funding, and in partnership with the Virginia Health Workforce Development Authority 

we have trained 300 health professionals across the disciplines to 

become certified telehealth presenters, and/or coordinators to keep 

pace with the demand for such trainees. Telehealth should be incorporated into every medical and nursing school curriculum, with 

subsequent experiences during graduate medical education so as to 

prepare our physicians and nurses on the appropriate use of telehealth in everyday practice. 

11. The evidence: 

In 2013, the American Telemedicine Association reported ‘‘Over 

40 years of research has yielded a wealth of data about the cost effectiveness and efficacy of many telemedicine applications.’’23

More than 20,000 citations in the peer reviewed literature address outcomes across the specialties, including pediatric cardiology, high risk pregnancies, congestive health failure, asthma, 

chronic obstructive pulmonary disease, cancer, telepathology, teleradiology, diabetes care, dermatology and wound care, to name just 

a few. The overwhelming evidence is that telemedicine and remote 

patient monitoring compares favorably with in person care, and in 

many cases, is associated with better outcomes. 

a. Home telehealth 

Home telehealth is defined as the use of synchronous or asynchronous telecommunications technologies by a home care provider to link patients to out-of-home sources of medical care, 

education, or other services. These services may incorporate 

interactive home telehealth technologies using POTS (plain old 

telephone service) or broadband telecommunications technologies. Home telehealth programs generally include monitoring devices such as pulse oximetry, blood pressure, EKG, 

blood sugar, weight, temperature, and passive monitoring of 

motion. It has been reported by the Food and Drug Administration, which regulates medical devices, that home care systems represent the fastest growing segment of the medical device industry. 

Home telehealth can be utilized by traditional home health agencies, for the delivery of hospice care, or for case management by 

providers, clinics or hospitals to facilitate chronic disease management for patients. Home telehealth programs reduce readmission 

rates, visits to the emergency room, physician visits, and impart 

significant cost savings. The federal government supports major 

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24Darkins, Adam, Patricia Ryan, Rita Kobb, Linda Foster, Ellen Edmonson, Bonnie Wakefield, and Anne E. Lancaster. ‘‘Care coordination/home telehealth: the systematic implementation of health informatics, home telehealth, and disease management to support the care of veteran patients with chronic conditions.’’ Telemedicine and e-Health 14, no. 10 (2008): 1118–1126. 25Dimmock, S et al, A case study of benefits and potential savings in rural home telemedicine, 

Home Healthcare Nurse, 2000: 18 (2) 124–135. 26 Bashshur, Rashid L., et al. ‘‘The Empirical Foundations of Telemedicine Interventions for 

Chronic Disease Management.’’ Telemedicine and e-Health (2014). 6 Veith, Sharon T et al 

initiatives for aging in place such as PACE, but does not cover the 

technologies that will keep people healthy, and independent in 

their own homes. 

The Veteran’s Administration has published data to demonstrate 

that the VA Care Coordination and Home Telehealth program reduces hospital admissions by 19% and hospital days by 25% for patients with chronic disease.24

Integration of home telehealth into rural models of healthcare is 

a particularly efficient cost-effective choice when one considers the 

distances traveled by home health staff in rural areas. Factoring in 

the time spent traveling to the home, significant cost savings accrues with the use of these technologies. Dimmock et al report the 

cost savings associated with the supplementation of regular in 

home visits by home telehealth visits at approximately $50/visit.25

A recent analysis of the evidence for telemedicine interventions 

to include remote patient monitoring has identified significant costsavings and improved outcomes when applied to the management 

of chronic illness.26 These findings are consistent with our earlier 

referenced UVA Center for Telehealth experience. 

12. Acceptance of advanced technologies 

Patient acceptance of and satisfaction with the use of telehealth 

technologies for consultation and ongoing acute and chronic care 

has been remarkably positive, attributable in part to the obvious 

benefit of timely access to locally unavailable specialty healthcare 

that spares patients the burden and expense of travel to remote 

tertiary and quarternary healthcare facilities. Indeed, we have collected data in many of our programs that demonstrates the telehealth ‘‘no-show’’ rate is considerably lower than the in-person clinic ‘‘no shoe rate.6

Provider acceptance of advanced technologies and telehealth tools 

has been equally gratifying for patient consultation, patient education, distance learning opportunities, and for collaborations in remote patient monitoring. 

Conclusion: 

Telehealth is an essential tool to address the significant challenges of access to high quality care for both acute and chronic disease management, to mitigate workforce shortages, improve population health and lower cost of care. There are many opportunities 

for small practices to integrate telehealth models into every-day 

practice. However, even for large healthcare systems, managing 

and navigating the complex legal and regulatory environment 

which impacts the practice of healthcare using telehealth tools can 

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be challenging. For small group practices and solo practitioners, 

telehealth holds great promise, but the administration and regulatory challenges can be overwhelming. Thus it is imperative that 

we create and promulgate policies that foster certainty, transparency, high quality, secure and sustainable solutions that empower patients, providers and payers to adopt 21st Century models 

of care. 

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36 

Telemedicine and Small Physician Practices 

Testimony presented before the House Committee on Small Business, 

Subcommittee on Health and Technology 

July 31, 2014 

Megan McHugh, PhD 

Research Assistant Professor 

Director, Program in Health Policy and Implementation 

Center for Healthcare Studies, Institute for Public Health and 

Medicine & 

Department of Emergency Medicine 

Northwestern University 

Feinberg School of Medicine 

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Thank you Chairman Collins, Ranking Member Hahn, and members of the Subcommittee. I am honored to have been invited to 

testify before you today on this important policy topic. My name is 

Megan McHugh, and I am a research assistant professor at Northwestern University, Feinberg School of Medicine. My research and 

teaching focus on federal health policy and the impact of policy 

changes on health care cost, quality, and access. The opinions that 

I will share today are my own, and not the University’s. 

My testimony is organized around three points: 

1. By adopting telemedicine services, small physician practices may be better prepared to participate and succeed in new 

payment and delivery models, such as bundled payment. 

2. Reimbursement and state licensing policies serve as barriers to the adoption of telemedicine by small practices. 

3. Any policy that expands the use of telemedicine should be 

carefully monitored. While there is promising evidence about 

the value of telemedicine, the evidence is not conclusive (or 

easily accessible to physicians in small practices). 

Telemedicine and New Payment and Delivery Models 

There is widespread agreement that the traditional fee-for-service system, which pays providers for each visit, procedure, or test, 

is an obstacle to achieving the triple aim of better health care, better health, and lower cost.1,2 Researchers, health care advisory 

groups, and policy makers have called for public and private payers 

to move away from the fee-for-service system toward reimbursement models that reward providers for the quality of care delivered, cost consciousness, and patient satisfaction.3-5 As a result of 

these calls, the way in which physicians and hospitals are paid is 

beginning to change. For example, the Centers for Medicare and 

Medicaid Innovation (CMMI), created under the Affordable Care 

Act, launched a bundled payment initiative in which providers receive a fixed, negotiated fee covering a set of treatment services for 

an episode of care (e.g., hip replacement, stroke). Providers are also 

required to report quality data. The single, set payment per episode 

encourages providers to manage costs and integrate care, and the 

reporting requirements promote accountability for care quality.6

Similarly, the CMMI is supporting new models at the state level. 

The State of Oregon received a grant to reorganize its delivery system into coordinated care organizations (CCOs). CCOs are networks of different types of providers that have agreed to work together to manage the care of Medicaid enrollees financed by a single per-patient budget. 

Telemedicine has an important place in these value-based purchasing models. Reimbursement is not contingent upon in-person 

services; instead, providers have the flexibility and the financial incentive to care for patients using the best means possible at the 

lowest cost. Several studies have shown that telemedicine costs less 

than in-person visits, and may reduce utilization of high-cost services. One study found that the availability of telemedicine 

videoconferencing after hours in nursing homes reduced hospital 

readmissions and led to approximately $150,000 in Medicare savSBREP-219 with DISTILLER

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ings per nursing home each year.7 Additionally, a primary care 

electronic consultation system that allowed iterative communication between a referring physician and specialist resulted in 20% 

fewer specialty referrals.8

Given the momentum towards value-based purchasing, small 

physician practices and hospitals would be well-served by exploring 

whether and how telemedicine could be used to support high-quality care at a reduced cost. 

Challenges to the Adoption of Telemedicine by Small 

Practices 

While there are several barriers to the adoption of telemedicine 

by small physician practices, the two that are arguably the most 

important and policy relevant are reimbursement and licensing. 

Reimbursement 

Medicare generally limits payment for telemedicine services to 

interactive audio and video telecommunications with real-time conversations where the originating sites are located in a rural area.9

As a result, telemedicine accounts for a very small portion of Medicare services. Only 369 providers had 10 or more Medicare telehealth consultations in 2009, and in 2011, Medicare payments for 

telemedicine totaled over $6 million.10,11 Medicare’s rather cautious 

policies related to reimbursement for telemedicine are magnified 

because private insurers often look to the Medicare program when 

crafting their own reimbursement policies. 

However, through the rulemaking process, the Centers for Medicare and Medicaid Services (CMS) has been gradually expanding 

reimbursement for telemedicine. For example, CMS changed to geographic criteria for originating sites for calendar year 2014. Previously, payment for telemedicine services was limited to rural 

areas that were not located in a metropolitan statistical area 

(MSA). This year, payment for telemedicine services is also available in rural census tracts within MSAs, which will expand reimbursable telemedicine services to nearly 1 million rural Medicare 

beneficiaries. CMS also added coverage for complex chronic care 

services for patients with multiple chronic conditions, as well as 

transitional care management. Earlier this month, CMS proposed 

to add annual wellness visits, psychoanalysis, psychotherapy, and 

prolonged evaluation and management services to the list of covered services. 

Although research on the impact of telemedicine on cost, quality, 

and access is promising, the evidence is not conclusive. As a result, 

I believe the gradual expansion of telemedicine coverage under 

Medicare is a sensible course of action, and one that will produce 

a slow but steady increase in the number of small practices that 

effectively and efficiently use telemedicine. 

Licensing 

While state borders may be irrelevant to the delivery of quality 

care via telemedicine, they do present an important legal barrier. 

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In most instances, physicians are limited to practicing in states 

where they are licensed. Telemedicine practice is regulated at the 

state level by state medical boards, which are given authority by 

state legislatures. Some state medical boards require telemedicine 

providers practicing across state lines to have a valid state license 

in the state where the patient is located.12 Those who support requirements for physicians to be licensed in the same state as their 

patients, including the American Medical Association, argue that 

easing state licensure could compromise patient safety. For example, state regulators may have no power to conduct an investigation 

of an out-of-state provider if a patient is harmed. Obtaining an additional state license to practice telemedicine typically costs between $200 and $600 per state, and the administrative and time 

burdens are substantial. These burdens may be greater for small 

practices, which are less likely to have support staff who can help 

navigate this process. 

My personal opinion is that the current medical licensure system 

is inadequate to address the growing practice of telemedicine. 

There are several alternative models that could be considered, 

though each presents challenges. For example, federal licensure 

and regulation would inevitably raise federalism concerns as professional licensure has historically been a state power. Another option is an interstate agreement that would grant privileges in all 

participating states, provided that the physician has a valid license 

in at least one of the participating states. However, when this approach was attempted by the nursing profession, only half the 

states adopted the interstate agreement.13

Notably, decisions by state medical boards may come under 

greater scrutiny with the Supreme Court scheduled to hear oral arguments in the case of North Carolina State Board of Dental Examiners v. FTC. The board, overseeing the practice of dentistry, 

sent cease-and-desist letters to unlicensed practitioners who removed stains from teeth. The Federal Trade Commission accused 

the board of illegally excluding non-dentists from the teeth-whitening market. While this conflict involves a dental board, the outcome could have repercussions for how states regulate medical 

practice. The court will consider whether a regulatory board whose 

members have a financial interest in the industry it is charged 

with regulating can define practice to reduce competition. 

Evidence on the Impact of Telemedicine 

The academic literature on the impact of telemedicine is voluminous and still growing. Overall, the evidence suggests that telemedicine can improve access to care and the value of care. Here are 

just two examples: 

• The Veterans Health Administration has a national home 

telehealth monitoring program that provides routine care, care 

management, and case management services to veterans with 

chronic illness through remote monitoring. Patient satisfaction 

levels are high (greater than 85 percent), the program facilitated independent living, and it reduced hospital days by 40 

percent.14,15

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• Using store-and-forward teledermatology (where a referring physician uploads a patient history and images of a skin 

lesion to a secure site for a consulting dermatologist to review), 

dermatologists at Kaiser Permanente in San Diego were able 

to handle 50 percent more cases compared to face-to-face visits.15 Other research has shown that teledermatology consults 

are just as accurate as in-person consults. Store-and-forward 

teledermatology consults reduce in-person clinic appointments 

by 25 percent, and real-time teledermatology consults reduce 

clinic appointments by 50 percent. Satisfaction among patients, 

referring clinicians, and dermatologists is high.16

However, evidence of the impact of telemedicine is not entirely 

consistent. For example, one study found that physicians were 

more likely to prescribe antibiotics when the visits occurred via 

telemedicine, suggesting that telemedicine may result in a more 

conservative care plan, which could have unintended consequences, 

such as antibiotic resistance.17 A randomized controlled trial found 

that telemonitoring for frail older adults did not reduce hospitalizations or emergency department visits, and was associated with 

greater mortality.18 In a recent compilation of systematic reviews 

on telemedicine, twenty reviews concluded that telemedicine was 

effective, 19 were less confident about the effectiveness of telemedicine but noted its potential, and 22 concluded that its effectiveness 

was limited or inconsistent.19

Clearly, there is a need for continued research in this area. Additionally, there are two other issues concerning research that should 

be addressed. First, many studies of the effectiveness of telemedicine have been conducted within hospitals or large physician practices affiliated with health systems. As a result, our understanding 

of the impact of telemedicine among small, independent practices 

is much more limited. Second, information about the impact of telemedicine is typically published in the academic literature, which is 

not easily accessible to leaders of small practices. This limits physicians’ ability to make informed decisions about whether or not to 

adopt telemedicine. 

Despite the gaps and inconsistencies in the evidence, I believe 

that telemedicine holds great potential to expand access, improve 

care, and reduce cost. This past year, my colleagues and I at Northwestern University designed a new model for primary care in partnership with a private foundation. Our model incorporates telemedicine, reflecting our belief that telemedicine can not only improve the value of health care, but also improve patient and provider satisfaction, and potentially make the practice of primary 

care more attractive to physicians. We are currently developing an 

implementation plan for the adoption of this primary care model by 

small physician practices. 

Conclusion 

In conclusion, telemedicine is an important tool for small practices as payers transition away from the fee-for-service model. 

State and federal policy makers have the ability to facilitate the 

adoption of telemedicine through policies related to reimbursement 

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and licensing, but expansion should be coupled with oversight to 

monitor impact. 

Again, I would like to thank you for allowing me to appear before 

you today and share my opinions on this topic. I would be happy 

to take your questions. 

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1Federal Communications Commission. National Broadband Plan: Healthcare Broadband in 

America. 2004. Retrieved from www.broadband.gov 

INTRODUCTION 

Good morning, my name is Maggie Basgall and I serve as the 

Community Development Specialist for Nex-Tech in Lenora, KS. 

Thank you for inviting me to join the panel this morning—it’s an 

honor to testify on behalf of NTCA—The Rural Broadband Association and its nearly 900 small, rural telecom provider members who 

deliver high-speed broadband and other advanced telecom services 

to rural America that form the essential foundation of telemedicine 

and other innovative applications. 

Among its 25,000 plus customers spread across 9,300 square 

miles of rural northwest Kansas, Nex-Tech serve 11 hospitals, 14 

health clinics, and numerous small physician practices. Ten of 

those hospitals have already adopted telemedicine, and all plan to 

use it more extensively in the future. Thanks to Nex-Tech’s ambitious broadband-capable network deployment efforts through the 

years, many of these healthcare providers can access up to 100 

Mbps broadband. Depending on size, these entities purchase a 

range of services from 20 Mbps to 100 Mbps—the same speed recommended by the Federal Communications Commission’s (FCC) 

2010 National Broadband Plan (NBP) for achieving full 

functionality of real-time diagnostic imaging.1

Broadband is proving to be a great equalizer for rural America. 

This is especially true for health care needs in rural areas, as highspeed broadband helps healthcare providers serve patients more efficiently and effectively. One of Nex-Tech’s goals is to provide doctors with the resources to fully realize what broadband capabilities 

generally and telemedicine more specifically can offer patients, especially through technology that helps overcome the distance between rural health centers and patients. 

To be clear upfront, broadband isn’t only used and useful for telemedicine. It has become essential to the very provision of 

healthcare in any form or fashion, as doctors’ offices, clinics, and 

hospitals need broadband to: backup systems at offsite data centers; connect with insurance companies to check eligibility; offer 

electronic billing; conduct research; and host educational webinars. 

Further, some hospitals provide IT services to other facilities and 

thereby reduce hardware and software costs. 

But even with these many benefits for the provision of healthcare 

generally, it is clear that broadband can play a special role in rural 

areas by enabling greater telemedicine functionality and helping 

residents overcome the challenges of distance that make so many 

tasks more expensive and time consuming. Telemedicine means a 

patient in need of an immediate mental health consultation who 

lives hours from the nearest facility can have an instant connection 

to their psychologist through a telemedicine platform at their local 

hospital. Another patient may need digital x-ray scans sent to a 

far-away physician who can assess how their fracture is progressing. These are only a few of examples of the telemedicine possibilities that robust broadband enables. 

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To help promote greater adoption of advanced telemedicine capabilities, Nex-Tech recently assembled a pilot project with the goal 

of helping a large local hospital offer in-home treatment for patients through telemedicine. We assembled a team of technology 

and business experts to serve as advisers to our customer, and we 

offered to cover some technology costs for a couple of years to help 

get the project off the ground. Unfortunately, we had to suspend 

the project because, due to lack of health insurance reimbursement 

for care through in-home telemedicine, our customer couldn’t make 

the service work financially over the long-term. The interest was 

there from all parties, but reimbursement was essential to make it 

work financially. 

Healthcare professionals generally need three significant barriers 

removed before they can adopt and implement telemedicine: 1) robust broadband capability, 2) money for hardware and software, 

and 3) staff who know how to use the technology. Insurance reimbursement may present a major barrier to in-home telemedicine, 

but availability and adoption of technology present other obstacles, 

not only in rural Kansas but in rural areas across the US. 

While barriers to in-home telemedicine remain, healthcare providers are still able to use numerous other existing and innovative 

applications that help them provide better care to patients. For example, thanks to robust, wired broadband that enables high-speed 

Wi-Fi at the rural health clinics in our service territory, soon hospitals will be able to deploy robots that can effectively transport a 

doctor stationed at a hospital to a far-away rural area. Patients 

who visit the clinic are able to interact with the doctor through the 

robot, which is equipped to conduct diagnostic testing. The same 

Wi-Fi is helpful to doctors who travel to clinics and need to use 

their mobile devices while on the premises to communicate with 

other health care professionals. 

Currently, licensing of doctors is handled at the state level and, 

as such, oftentimes providers cannot serve patients across state 

lines, which greatly limits the use and/or implementation of virtual 

telemedicine visits. The TELE-MED Act (H.R. 3077), introduced by 

Representatives Devin Nunes (R-CA) and Frank Pallone (D-NJ), 

improves seniors’ access to care by permitting Medicare providers 

who are licensed to practice physically in one state, to treat patients electronically across state lines in any U.S. jurisdiction, without having to obtain additional state licensing or authorization. 

The bill builds upon recent congressional efforts that have expanded virtual care for military personnel and veterans. I applaud 

the efforts of Representative Nunes and Pallone for their leadership on this matter. Government programs provide some assistance. For example, the American Recovery and Reinvestment Act 

sought to promote use of electronic health records (EHRs) through 

Medicare and Medicaid and regional extension centers such as the 

Kansas Foundation for Medical Care, which provides ongoing technical assistance to practices. The NBP also recognized the potential 

of telemedicine over four years ago and recommended that the federal government further incentivize and promote widespread adopSBREP-219 with DISTILLER

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2 Id. 

tion.2 This is accomplished in part through the FCC’s Universal 

Service Fund (USF) and the rural telecom lending and grant portfolio of the USDA’s Rural Utilities Service (RUS). However, many 

rural health centers—especially family practice physicians—still 

lack the resources to fully use telemedicine capabilities. 

USF can help fill telemedicine deployment and adoption gaps 

through two of its four components. The USF High Cost fund supports the actual rural networks that Nex-Tech and about 1,000 

other small, rural telecom providers deploy all over the country. 

These networks deliver the broadband data and other traffic that 

make telemedicine possible; all of the efforts we’re discussing 

would not be possible in the absence of those networks that highcost USF support enables and sustains in the first instance. The 

USF Rural Health Care (RHC) fund can further help healthcare 

providers pay for services, thereby stimulating adoption and use. 

Most hospitals and doctors’ offices operate on very tight budgets, 

such that telemedicine often has to take a back seat to other vital 

priorities, such as ensuring the facility is staffed with the best 

available doctors, physician assistants, and nurses. USF can help 

bridge this financial gap through RHC, which is available to nonprofit and public healthcare providers located in an FCC-approved 

rural location. 

Finally, Nex-Tech couldn’t have delivered broadband to rural 

western Kansas without the help of RUS’s rural telecom portfolio 

and the seasoned experts that staff the department. Not only does 

RUS lend for broadband-capable plant in rural territory, it also offers a telehealth program that helps healthcare providers purchase 

the hardware necessary to use telemedicine. The critical role that 

USF and RUS play in telemedicine deployment and adoption are 

discussed further below. 

USDA RURAL UTILITIES SERVICE 

RUS Role in Telemedicine and Rural Telecom Deployment 

USDA’s Rural Utilities Service’s Distance Learning & Telemedicine (DLT) Grant Program helps healthcare providers adopt telemedicine through grants for capital assets such as computer hardware and software, audio and video equipment, and other network 

components. Traditionally, approximately 40% of program funds 

support telemedicine. Eligible entities include corporations, partnerships, and state or local units of government providing education and medical care via telecommunications. With funds for 

telemedicine in short supply at so many doctors’ offices, clinics and 

hospitals. DLT has played a key role in establishing hundreds of 

telemedicine systems in rural areas across the U.S. USDA Community Facilities Loans and Grants are also available to help rural 

towns construct healthcare facilities and purchase equipment. 

RUS also plays a crucial role in rural broadband deployment 

through its telecom loan portfolio that finances network upgrades 

and deployments in rural areas. RUS has been lending for 

broadband-capable plant since the early 1990s. RUS lending and 

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Universal Service Fund (USF) support are inextricably linked at 

99.2% of RUS Telecommunications Infrastructure borrowers receive 

High-Cost USF support. The presence of high-cost recovery is crucial to the RUS telecom and broadband loan calculus. RUS programs have helped rural providers deploy modern networks in 

many rural areas where the market would otherwise not support 

investment. Reliable access to capital helps rural carriers meet the 

broadband needs of rural consumers at affordable rates. 

Nex-Tech began providing broadband in Western Kansas in 1998 

with the help of RUS financing. The company later acquired 10 exchanges from another carrier and then used an RUS loan to build 

fiber tot he premise (FTTP) on those communities. This type of financing is not readily available from the private sector due to the 

challenges of operating in rural areas and the long-term payback 

in doing do, and this RUS financing comes in the form of loans that 

must be paid back with interest, creating a win/win situation for 

taxpayers and the rural broadband consumers who need the technology now. 

Unfortunately, the success, momentum, and economic deployment achieved from the RUS’s telecommunication programs were 

put at risk as a result of the regulatory uncertainty arising out of 

USF reforms that are discussed in greater detail below. It will be 

all the more important to continue providing RUS with the resources it needs to lend to the rural telecom industry as demand 

for financing will inevitably increase when reforms are improved 

and regulatory certainty is restored. Once again, telemedicine efforts will be for naught if robust broadband-capable networks 

aren’t there in rural areas to support those efforts or if the 

broadband services offered on those networks are not affordable 

and upgraded over time. 

THE USF HIGH COST FUND AND RURAL HEALTH CARE 

PROGRAM 

USF Rural Health Care Program 

The High Cost and Rural Health Care components of USF have 

a symbiotic relationship—the High Cost Fund supports the rural 

networks that carry telehealth and other data all over the world, 

and the Rural Health Care Fund can help healthcare providers 

purchase telecom services so they can send and receive data over 

the network. Both components are essential to telemedicine adoption. 

The RHC is available to non-profit and public healthcare providers located in an FCC-approved rural location. Within RHC, the 

Telecommunications Program provides discounts for telecommunications services and, as of last month, broadband. Funding for 

broadband is now available through the new Healthcare Connect 

Fund (HCF). HCF provides a 65 percent discount on eligible expenses related to broadband connectivity to rural health care providers. Finally, the new HCF is also serving participants in what 

was formerly known as RHC’s Pilot Program, which provided funding for construction or implementation of state and regional 

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3 U.S. Government Accountability Office, (2014). Telecommunications: USDA Should Evaluate 

the Performance of the Rural Broadband Loan Program. (GAO Publication No. GAO–14–471). 

Retrieved from http://www.gao.gov/assets/670/663578.pdf 

broadband networks. Hundreds of health care providers are participating in the program through 50 active projects. 

Pilot Program participants include The University of Kansas City 

for Telemedicine & Telehealth (KUCTT), whose telehealth network 

has over 100 sites throughout the state—including Nex-Tech customer Hays Medical Center. KUCTT uses the network to conduct 

clinical consultations and host educational events. 

The FCC’s High Cost Fund Reforms 

As I have noted earlier, telemedicine simply cannot be implemented without an underlying robust, wired broadband network. 

Though demand for faster broadband is expected to increase dramatically in the near future, RUS received only 29 broadband loan 

program applications for rural network loans in fiscal years 2011– 

2013, compared to 130 in the first three full years of the program.3

Why would an experienced lender such as RUS want for customers 

when demand for networks is high? Look no further than the state 

of rural telecom cost recovery mechanisms. 

For example, the FCC’s 2011 ‘‘Quantile Regression Analysis’’ (or 

‘‘QRA’’) model to cap USF support for small carriers created rampant uncertainty in the rural telecom marketplace. In short, the 

QRA model took data from the investments and operations of hundreds of small carriers in the United States from two years in the 

past and then, on the basis of over a dozen different variables, ran 

those costs through a formula that created new caps each year to 

govern each carrier’s USF support. This was an unsustainable approach to universal service that ran directly contrary to the congressional mandate that USF be predictable; the errors in capturing actual costs used and useful in providing universal service 

also meant the QRA model did not satisfy the congressional mandate that USF be sufficient. 

Despite the fact that the FCC ultimately eliminated the troubling QRA caps after a few years, the question of what comes next 

creates its own lingering regulatory uncertainty. Updates to legacy 

USF support rules are still very much-needed. For example, in 

rural areas served by smaller companies such as Nex-Tech, FCC 

rules still require customers to purchase landline voice service in 

order for their line to receive USF support. The customer is effectively denied the option of cutting the landline-voice cord and purchasing only broadband. Such outdated rules that undermine consumer freedom and inhibit technological evolution present an obstacle to the technology transition that consumers and industry are 

making and the FCC is working to expedite and facilitate in other 

contexts. Universal Service support should not be tied to a limited 

service, but available instead to advanced networks that provide 

consumers with access to a variety of essential, high-quality services from which each consumer may choose. 

Nearly three years after a ‘‘Transformation’’ order, small, rate-ofreturn providers still await an updated cost recovery mechanism 

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4See US House letter led by Representative Gardner and US Senate letter led by Senators 

Thune and Klobuchar, both sent to FCC Chairman Wheeler on May 6, 2014. See also rural organizations letter sent to Chairman Wheeler on March 5, 2014. 

that will provide sufficient and predictable support for the simple 

act of responding to consumer demand for better broadband. Meanwhile, the Connect America Fund set up for larger companies in 

that 2011 order is in year four of development—a good indication 

that, if this is how long it takes to create and implement such 

changes, greater emphasis should be placed on creating a similar 

fund for smaller carriers as soon as possible. The FCC should move 

forward immediately to adopt and implement a carefully tailored 

update of USF that will provide sufficient and predictable support 

for broadband-capable networks in areas served by smaller rural 

carriers. Over 130 members of Congress—including Chairman 

Graves and other Small Business Committee leaders—along with 

dozens of organizations that serve rural America encouraged the 

FCC to act through a series of letters earlier this year.4

The broadband revolution presents major opportunities for small 

businesses to innovate and grow, but the business (or entrepreneur 

with an idea) must have broadband access to take full advantage. 

Markets will ensure many consumers realize the full benefits of innovation at the lowest possible prices, but in rural areas there are 

often no such markets to speak of. Though small, rural providers 

have been leaders in broadband investment even under the current 

statutory and regulatory regime, further law and policy changes 

will be necessary to ensure high cost rural areas both become and 

remain served even as providers also edge broadband out into 

unserved areas. We cannot hope to realize the full benefits of 

broadband for the provision of healthcare generally, and telemedicine more specifically in rural areas, if outdated rules deny support 

for broadband-capable network investments or the threat of adverse changes to these USF rules create uncertainty in making the 

decisions to undertake such long-term investments. Sufficient and 

predictable USF support that provides recovery for both the initial 

costs of installing a rural broadband network and the ongoing costs 

of operating and upgrading the network over time must be seen as 

a prerequisite to any successful efforts in telemedicine. 

CONCLUSION 

Telemedicine already offers health care providers numerous ways 

to better serve patients, and many more exciting innovations are 

on the horizon. The desire for advanced telemedicine already exists, 

but now we must supply—and then sustain—the robust broadband 

capability, funding, and education to spur increased adoption of the 

services across the country. 

Nex-Tech and its counterparts in the rural telecom industry are 

thrilled to play a key role in this process by delivering the networks that carry the data, and we look forward to greater collaboration with the healthcare industry to work through any barriers 

to adoption. 

Rural America will not realize the promise of telemedicine without a broadband-oriented USF that offers carriers the regulatory 

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certainty needed to make network investments. Support through 

the USF Rural Health Care Fund and RUS Distance Learning and 

Telemedicine Grant Program for doctors and nurses who need to 

purchase hardware, software, and telecom services will continue to 

be helpful in the advancement of telemedicine. We look forward to 

working with Congress and the appropriate agencies to ensure 

these programs work as efficiently and effectively as possible. 

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U.S. House Small Business Committee 

Subcommittee on Health and Technology 

Hearing on 

‘‘Telemedicine: A Prescription for Small Medical Practices’’ 

July 31, 2014 

Chairman Collins and Ranking Member Hahn, as a fellow of the 

American Academy of Dermatology Association (Academy), which 

represents more than 13,000 dermatologists nationwide, and a past 

president of the Medical Society of Northern Virginia, I commend 

you for holding a hearing on how new technologies and advances 

in telemedicine can further efficiency, quality, and access to health 

care. We applaud you for raising awareness of this care delivery 

model and look forward to working with you to ensure that our patients can benefit from advances in telemedicine, while also receiving high-quality, timely, cost-efficient care. 

I am here today to discuss barriers of implementing telemedicine 

as a modality of care. Specifically, lack of reimbursement and cumbersome credentialing pose the greatest challenges. Although some 

reimbursement exists, it is not consistent across payers or across 

states to allow for proper patient access. To place this issue in context however I would like to first discuss who I am and who I am 

here on behalf of. The Academy is a leader in supporting the expansion of telemedicine, while ensuring quality of care is delivered. 

As dermatology is a visual specialty, it lends itself well to telemedicine in various patient scenarios. 

Telemedicine is an innovative, rapidly evolving method of care 

delivery. The Academy supports the appropriate use of telemedicine as a means of improving access to the expertise of Board certified dermatologists to provide high-quality, high-value care. Teledermatology services are valuable means of improving patient care 

to underserved patients with limited access to speciality care, as a 

triage tool to determine which cases need to be seen in person most 

urgently, or as a platform to deliver care to those who are unable 

to receive the benefits of face-to-face dermatology visits. As the 

field of telemedicine continues to grow, there is significant potential to improve access to care coordination and communication between other specialities and dermatology. 

While teledermatology is a viable option to deliver high-quality 

care to patients in some circumstances, the Academy supports the 

preservation of a patient’s choice to have access to in-person dermatology services. Teledermatology providers choose between or 

combine two fundamentally different care delivery platforms 

(Store-and-Forward vs. Live Interactive), each of which have 

strengths and weaknesses. Live interactive teledermatology takes 

advantage of videoconferencing as its core technology. Participants 

are separated by distance, but interact in real time. Store-and-forward teledermatology refers to a method of providing asynchronous 

consultations to referring providers or patients. A dermatologic history and a set of images are collected at the point of care and 

transmitted for review by the dermatologist. In turn, the dermatologist provides a consultative report back to the referring provider or patient at the point of care. 

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As a provider who runs a small dermatology practice in Northern 

Virginia, I currently utilize DermUtopia for the provision of telemedicine. This is a HIPAA compliant, mobile phone and web-based 

application. Through this application, I am able to evaluate and 

treat both my patients and those who do not have a primary dermatologist. We are also currently in discussions with the safety-net 

and federally qualified health clinics in the area, and hope to use 

this store-and-forward application to provide care for their patients 

in the near future. 

Some of these clinics will refer patients that they see through 

Project Access of Northern Virginia, a program of the Medical Society of Northern Virginia Foundation that provides specialty medical care to low-income, uninsured safety-net patients who reside in 

Northern Virginia. Additionally, we are aiming to treat Medicaid 

patients through DermUtopia. However, there have been delays in 

an ability to solidify funding, despite the fact that Medicaid has approved reimbursement for telehealth services. 

I have faced several barriers to most effectively providing care 

via telemedicine. While I face these barriers as a physician, it is 

ultimately the patients—often the most economically vulnerable— 

that are the most directly affected. The largest barrier as noted is 

reimbursement for telehealth services. Without assured reimbursement, providers and patients are unlikely to utilize telehealth. 

While Virginia law addresses coverage for telehealth services, this 

does not guarantee access with all private insurance and many 

states do not have similar policies. Provider knowledge and use of 

teledermatology is often limited in these areas. Congress can help 

set the stage for larger-scale reimbursement by, for example, enabling Medicare to reimburse for telemedicine services. 

Appropriate reimbursement for these physician services could be 

implemented in a variety of contexts. The Academy believes that 

retaining state-based licensure is the best way to preserve accountability and protect patients. However, we do favor changes, such as 

the Compact proposed by the Federation of State Medical Boards, 

which would make it easier for doctors to be licensed in multiple 

states. Support for studies of existing health systems that could 

show the impact of teledermatology on access, quality and cost of 

care in healthcare ecosystems would be beneficial. This would be 

pivotal in assessing the value of telemedicine and a great step in 

the goal of removing reimbursement as the biggest hindrance to 

the proliferation of telemedicine. 

The benefits of such reimbursement would be widespread. Teledermatology can save a patient time missed from work, travel time, 

and, in the correct clinical context, allows for timely diagnosis and 

treatment when face-to-face care is unavailable or inaccessible. 

While teledermatology has been traditionally used to increase access in remote or underserved areas, it indeed has great potential 

for serving a great variety of patients with dermatology care issues. 

For instance, insured patients in urban areas may face similar access delays or issues as those in geographically remote areas, and 

therefore benefit from teledermatology. 

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I have seen first-hand a number of patients that could have had 

the consultation done virtually and prevented an onerous trip to 

the office, or to urgent care. For example, included are specific patients who could have a teledermatology consultation and receive 

treatment at their home or facility. An 89 year old woman who 

lives alone at home, with no family in the area, and who would 

need to be brought to the doctor via wheelchair and transport vehicle, may be more easily evaluated via telemedicine. A nursing home 

patient with dementia, who requires a nursing aid and transportation and coordination costs from the nursing home to evaluate 

multiple growths, could be evaluated via teledermatology. Finally, 

a 2 year old with severe eczema and infections who cannot get in 

to see a dermatologist due to lack of access to a Medicaid dermatologist and inability for parents to transport her during their 

work hours across the city, two bus rides away, could be evaluated 

and/or monitored via teledermatology. 

Many large health systems, including the Veterans Affairs (VA) 

and Kaiser Permanente, are reimbursed for their services and use 

telemedicine with great benefit. These programs help to improve 

access to dermatologic consultations within their integrated health 

system and reduce the turnaround time from referral to diagnosis. 

Additionally, a recent study by researchers at the University of 

Pennsylvania looked at individuals who were in the hospital who 

needed a doctor’s assessment for a skin problem. All of the participants had an in-person consultation with a doctor, and the researchers also sent photos of their skin conditions to two independent dermatologists remotely. They discovered a 90% agreement for recommendations to be seen in person and a 95% agreement in recommendations for biopsy between the in-person and remote doctors. Finally, emergency setting studies have shown a high 

patient acceptance rate of teledermatology and that it can provide 

rapid and accurate diagnostic and treatment advice from a dermatologist. This is especially vital in the cases of commonly 

misdiagnosed dermatologic conditions. 

Overall, telemedicine provides a modality of care which can expand access to medical specialists, such as dermatologists, but barriers to implementation remain. Most notably issues of proper 

credentialing and reimbursement exist to varying degrees across 

states. These barriers impact providers but ultimately can hinder 

patient access to care. I, as well as the Academy, appreciate the 

subcommittee’s continued leadership on this issue, and look forward to working with your office to ensure that patients can benefit from high-quality, timely, cost-efficient care via telemedicine. 

————————————————————————————— 

http://archderm.jamanetwork.com/article.aspx?articleid=1829638 

1http://www.medscape.com/viewarticle/455635 

1http://ncbi.nlm.nih.gov/pubmed/21995470 

1http://archderm.jamanetwork.com/article.aspx?articleid=1865056 

1http://www.nursingcenter.com/Inc/static?pageid=942376 

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